View Full Version : New Cement factories development and news
abesha September 29th, 2010, 04:55 AM New cement factories expected to shrink gap
Local cement producing factories that are under final stage for commissioning are expected to shrink the gap between demand and supply in the coming six months.
The country’s booming construction industry increased cement demand by 12 percent per annum starting from 2004, but the figure is currently way above 12 percent. “The current cement demand rate is higher than the previous growth rate,” one expert involved in the sector said.
Currently, local factories including small scale factories produce about 2.7 million ton of cement annually, while the estimated demand is over 8 million ton per annum.
The construction boom in the last three years, that triggered high cement demand, forced the government and some private companies to import the product. Though the imported cement was delivered to the market along with the local product, the market still did not settle down.
The gap between the high demand and short supply led the price of cement to scale up to 400 birr per quintal from the 250 birr price per quintal on the Addis Ababa market.
“The significant increase in cement production in the coming year will settle the market instability and fill the gap,” the expert added.
The new cement factories and others expansion that are expected to commence production in the coming few months will increase the supply of the product hence decreasing the wide gap that exists between demand and supply. This will actually force the price to decrease considerably.
The state-owned Mugher, the largest cement factory in the country, is currently expanding in order to increase its annual production to 2.4 million tones from the current 900,000 tones starting from the beginning of December 2010.
Private cement factories that are under construction or those that have finalized their projects are expected to minimize the cement demand gap by half along with Mugher’s new expansion, which is being constructed around Tatek Military Camp, 12km west of Addis Ababa.
One of the major private cement factories, the Chinese Hung Shen, is expected to commence production in November. The plant is located around Gebre Guracha, 165km northwest of Addis Ababa and has the capacity to produce four million tons of cement annually.
Experts say that cement demand is continuing to grow in relation with the rise of the construction sector. “The rapid rise of cement demand is expected to continue in the years to come, because currently most construction projects are halted due to cement shortage,” the experts explained. “When these projects revive, the demand will also grow.”
Currently about 25 local and foreign companies are registered in the country to engage in cement production, but most of them are not feasible, according to the information obtained from the Ministry of Mine and Energyhttp://capitalethiopia.com/index.php?option=com_content&view=article&id=13395:new-cement-factories-expected-to-shrink-gap&catid=12:local-news&Itemid=4
So we can expect that once these two plants start operating at full capacity,
the total production will go from 2.7 million tons per annum to 8.2 million tons per annum.
Several other cement companies are currently under construction, such as Derba Midroc and Habesha, so the capacity will keep increasing. Hopefully we'll start exporting as well.
Hersh September 30th, 2010, 04:51 AM I think manufacturers are being very unwise with their obsession with cement. It's one of the main causes of residential construction failures in the country. The limitations it places on design, time and the excessive cost burden it places on construction are some of the main causes of housing shortage in the country.
When the yearly demand is 80k and the country only outputs 6k, there is a major problem!..and that artificially drives the price of homes through the roof. There is already a huge housing bubble, along with the hyper-inflated price of cement. It will eventually burst.
The sooner someone realizes nothin beats wood frame construction along with magnesium oxide sheets, the better.
abesha September 30th, 2010, 05:10 AM ^^ That sort of technology is only just starting to arrive in the country but it apparently is receiving a lot of positive interest from construction companies.
It will take a while though before it takes off. In the meantime cement is needed.
abnet March 4th, 2011, 08:51 PM I think this one also belong here.
Web www.addisfortune.com
Addis Fortune
The thriving construction industry is increasing the demand for cement, but the increased prices is not a result of only normal supply and demand dynamics because traders and brokers are exploiting the excess demand for their own financial gain, writes MAHLET MESFIN, FORTUNE STAFF WRITER.
Internal Price Fixing Eschewing Cement Market
Ashenafi Bekele, 32, a father of one, went shopping for cement to construct a three-storey house for his brother, who resides in Switzerland, on a 300sqm plot, located around Ayat in Bole District, on Wednesday, February 23, 2011.
Upon entering a shop, Ashenafi inquired about the current prices and, after haggling a little, purchased 80ql of Jemmo Ordinary Portland Cement (OPC) at 400 Br per quintal, instead of the initial asking price of 415 Br. However, he was not happy with the brand.
“The district administration has written a letter to Mugher Cement Enterprise to order 250ql, but they said they have too many orders to fill and cannot help me,” he told Fortune.
Mugher cement costs 450 Br per quintal at the shop where Ashenafi made his purchase at Megenagna, a huge increase on the price at the factory’s 215 Br per quintal.
“Our lease agreement stipulates that we must commence construction within six months, making it difficult to wait for Mugher,” he said. “This situation and prices forced me to buy Jemmo.”
For the previous two weeks, a quintal had cost 370 Br, claimed Ashenafi, expressing surprise, not that prices are increasing, but at the rate at which they are doing so.
The country’s construction industry is thriving and big government projects like dams, condominium housing units, and road construction are underway, increasing the demand for cement.
The government has further plans to increase the national road network from the existing 49,000km to 136,000km, build a 2,000km railway line, and construct additional housing units to raise their number from the current 213,000 to 700,000, as part of the Five-year GTP. These projects are estimated in the plan to increase the demand for cement to 27 million tonnes per annum by 2015.
National demand is currently estimated at around 11 million tonnes. However, the combined total capacity of the 11 companies producing Ethiopia’s cement can only supply three million tonnes to the market annually, according to research conducted by the Ministry of Trade (MoT).
However, this discrepancy between the supply and the demand is not the problem for Ashenafi.
“I can buy 1,000ql from one cement shop here in Megenagna,” he told Fortune. “The product is available but the traders and brokers raise the price by only making a phone call.”
Traders across the city collude to keep their prices the same, so that a specific brand cannot be found at a cheaper price elsewhere and create price competition among traders.
“The MoT has no control over the cement distributors as most of them do not have licences,” an architect who has worked in the construction sector for 15 years told Fortune on condition of anonymity.
Individuals and government institutions who obtain cement are selling the product in large quantities and there is no mechanism with which the government can monitor whether the requested amount is used for the stated purpose, he claimed.
“The cement market is not governed by healthy rules of demand and supply, as the Prime Minister claimed,” he said. “Rather, it is dictated by illegal wholesalers, retailers, and brokers who control the market through use of their cell phones.”
This control over the market is confirmed by sources in the Ministry of Industry (MoI).
“All these irregularities in the cement market are occurring due to certain stakeholders using the excess demand for financial gain,” according to Nuredin Mohammed, director of Trade Registration and Licensing at the MoI. “The Addis Abeba City Trade and Industry Bureau gives out trade licences for wholesalers and retailers of cement. But monitoring the sources from which they obtain the cement they sell is the responsibility of the MoI, while the Ethiopian Revenues and Customs Authority (ERCA) should control whether the traders are using VAT receipts or not.”
The ministry is not lax in executing these duties, claimed sources inside the MoI.
“The ministry follows up on the cement that is allotted for major projects, like those in the manufacturing industry,” sources inside the MoI told Fortune. “There must be a mechanism to control the traders as well.”
http://www.addisfortune.com/Vol_10_No_565_Images/cement_graph_from_market_fort.jpg
Over the past four years, cement consumption has risen by an average of 35pc each year, well above the growth rates seen during this period for both overall GDP growth (11pc) and the construction sector (10pc). This annual growth rate is expected to remain almost the same for the next five years.
“Mugher prioritises the receivers of its cement, and the government, investors, real estate developers, and NGOs have a preference,” claimed a member of the company’s management who was not authorised to comment. “Yet, the factory satisfies only five per cent of the total demand from government developmental institutions.”
State owned Mugher Cement and private companies Messebo, owned by the Endowment Fund for the Rehabilitation of Tigray (EFFORT), and National Cement SC are the top three producers with a combined capacity of around 1.6 tonnes per year.
Hawaei Plc and Debresina Business Industries have been banned from manufacturing cement since January 21, 2011. This came after their products were found to be below standard by the former Ethiopian Quality and Standards Authority (EQSA) during a surprise inspection made on nine of the local factories. Since the inspection, another four companies have been working under stringent supervision by experts of the authority at their respective factories.
This situation is contributing to the shortage, according to sources at the Ethiopian Conformity Assessment Enterprise (ECAE), the new quality control branch of the the former EQSA.
“It is assumed that traders will increase prices if the ECAE announced that factories have been prohibited from producing,” an official at the enterprise, who is not authorised to comment, told Fortune.
While the production of certain factories has been stopped or limited, others are aiming to increase their production.
Mugher, Messebo, Derba Midroc, and Jemma cement factories are carrying out expansion projects, according to a document obtained from MoI. Upon being completed in 2012, these projects are expected to boost the production capacity by 2.9 million tonnes, according to estimations in the document.
As part of its expansion, Mugher is constructing a new factory around Tatek Military camp, located 12km west of the capital city.
“The project, which is being constructed as a total cost of 138.3 million dollars by Sinoma, a China based company, is to start trial production within two weeks and will start producing for the market soon after,” Elias Kifle, project manager of the construction, told Fortune. “The supply problem will be solved once the new expansion project comes online as it will produce a lot of cement for the market.”
Aside from the local companies, 25 companies have been registered to engage in cement production in Ethiopia, out of which 10 are foreign companies. These include Super Sunrise Industrial Plc, which has an investment capital of 9.5 billion Br; Sunrise Industrial Plc, with a capital of 8.3 billion Br and the capacity to produce three million tonnes per annum; and North Holding Plc, with a capital of five million Birr and 7.8 million tonnes annual production capacity.
Most of these are to be located in at Semen Shewa, Amhara Regional State, and Dire Dawa Town.
Yet, obtaining cement from foreign sources does not end there.
In order to meet the government’s demand for cement, the Ministry of Finance and Economic Development (MoFED) signed an agreement, in November 2010, with Maple Leaf Cement Factory, a private company based in Pakistan, to import OPC.
Since January 2011, the government has received 41,000 metric tonnes of cement out of the 1.5 million metric tonnes it had ordered from Maple Leaf, which was established in 1956 and is engaged in manufacturing and marketing cement with a total capacity of 3.6 million tonnes per annum. The cement is being allocated to large government construction projects.
However, an increased supply being allocated for government projects is unlikely to make a difference to small cement users like Ashenafi, who may remain subject to prices being set artificially high by traders.
By MAHLET MESFIN,
FORTUNE STAFF WRITER.
yosef March 12th, 2011, 06:36 PM Habesha Cement to Link Quarry, Town by Road
Company accepted bids for machinery to begin site clearing, construction of road
Habesha Cement SC accepted bids, on Friday, March 4, 2011, to rent machinery and vehicles to begin clearing the site for its factory and for the construction of a road between its quarry and the nearest town.
A total of 20 million Br has been set aside by the company for the construction of the road, according to Zelalem Admasu, manager of the contract administration and procurement department for the company, which was formed in September 2008 by Eskinder Desta, Nigeru Mulalaem, and Mersha Alemu, with a capital of 600,000 Br.
The road will lead from Goro Town of Western Shoa Zone, Oromia Regional State, to the quarry from where raw materials will be transported to the cement factory it plans to construct in Holeta Town, located in the same zone.
In September 2010, Habesha Cement, which has more than 15,000 shareholders, awarded a 79 million dollar contract for the engineering, procurement, and construction (EPC) of the factory to Northern Heavy Machinery Industries (NHI) Shenyang Co Ltd, a Chinese engineering company. At the time, the entire construction of the cement factory was estimated by the company to cost around 100 million dollars.
The machines the company wants to rent for clearing the site for the road are bulldozers, graders, excavators, rollers, loaders, as well as dump, water, and fuel trucks, according to Zelalem. Habesha plans to perform the cite clearing and road construction work by itself, he said.
However, the bid for the supply of the machines with which these works are to be preformed is not limited to a single company.
“We do not require one bidder to present all the machines,” he told Fortune. “As long as the companies have a valid business licence and VAT registered, many can win the tender.”
The budget set aside for the road includes hiring consultants for the design and supervision of the construction; a tender had been floated for this and the technical proposals made by the bidders are being evaluated, according to Zelalem.
The five consultancy companies who bid for the contract are C-Tech Engineering Co, Construction Design SC, Compass Aeped Consulting Plc, Pure Consulting Plc, and Classic Consulting Engineering Plc.
Addis Fortune (http://www.addisfortune.com/Habesha%20Cement%20to%20Link%20Quarry,%20Town%20by%20Road.htm)
musiccity March 12th, 2011, 06:37 PM ^^
good news :cheers:
abnet May 4th, 2011, 03:27 AM This news is from 2008 :D
Mugher expansion to ease cement shortage
By Groum Abate
Monday, 21 April 2008 11:42
About half of the expansion project of Mugher Cement Enterprise launched with an investment of 1.4 billion birr, has reportedly been completed.
The project is expected to play a significant contribution towards improving the severe shortage of cement that has hit the country repeatedly.
Mugher Cement Enterprise has been producing 3,000 tons of cement daily and would have the capacity to produce over 7,500 tons daily upon the completion of the expansion project next year, which will enable it to annually produce 1.4 million tons and create over 300 permanent jobs.
A sever cement shortage has hit the country and forced a halt to small scale construction in the city, after the government banned those who allegedly import cement with black market foreign currency.
Amazingly, the price of cement is stable without any change during the last couple of weeks.
Mugher Cement Enterprise, the biggest player out of the five cement factories in the country, could only meet five percent of the total demand.
According to a survey done by Mugher during the last Ethiopian fiscal year, the country’s demand for cement is 17.8 million tones annually, whereas the country’s total production is only limited to 1.9 million tones per annum.
Mugher cement factory accounts for the lion’s share of the cement market in Ethiopia with a production capacity of 900,000tn along with Dire Dawa cement factory with 72,000tn production per annum, Messebo cement factory with a capacity of producing 700,000tn annually and the new entrant, Abyssinia Cement a subsidiary of Abyssinia Steel.
Derba Midroc, sister company of Midroc Ethiopia; Ethio Cement; Jema Plc; and East Africa are also in the pipeline to start construction of cement factories. Other companies have also either started construction of factories or were granted land for cement factories, including Star Business Group, Nyala Metals, DH Geda, and National Cement Factory among others.
Furthermore, Nigeria’s leading industrial conglomerate, Dangote Group, who controls about two-thirds of the Nigerian cement market, signed contracts worth 1.2 billion dollars in February with China’s Sinoma International to built cement plants in Ethiopia, Democratic Republic of Congo, Equatorial Guinea, Tanzania, Senegal and Zambia.
abnet May 4th, 2011, 03:36 AM Update on this one.
Now after three years they are saying 95 percent completed and the cost reached 1.5 billion birr :bash:
Home News Mugher Cement Project nearing completion
Thursday, 28 April 2011 09:12
AMBO (ENA)-Expansion of Mugher Cement Factory being undertaken at a cost of 1.5 billion birr is nearing completion, the Factory said.
Factory Manager, Eng.Mekonnen Zergaw told ENA Tuesday that 95 per cent of the construction of the project has so far been finalized.
He said the project will help raise the factory’s production capacity from the existing 2000 tones per day to 5000 tones.
The project created 400 new jobs.
The Ethiopian Herald, Thursday, April 28, 2011
Yoniii May 4th, 2011, 06:51 AM abnet, thanks for keeping us updated.
Seems like importing cement from countries such as Pakistan won't be needed in the near future.
yosef May 16th, 2011, 02:37 AM Mugher Cement factory expansion vid: http://www.ethiotube.net/video/13962/ETV-News--Muger-Cement-Enterprise-inaugurates-additional-production-line
abnet May 20th, 2011, 06:33 PM Ethiopian cement factories to double capacity amid construction-industry boom.
Ethiopian Cement Plants to Double Capacity Amid Construction-Industry Boom
By William Davison - May 20, 2011 8:04 AM ET
Ethiopia will more than double its cement-output capacity after a new factory and two enlarged plants begin production later this year amid a building boom in the Horn of Africa country, a government official said.
The increase is expected to help end the need for imports by as early as next year, according to Shimeles Wolde, head of the Chemical and Allied Industries Directorate in the Industry Ministry. In recent years, Ethiopia imported about 1 million metric tons of cement annually to meet demand of about 8 million tons, Shimeles said in an interview.
“In 2012, there should not be that much need for importing cement,” Shimeles said today in Addis Ababa, the capital. “In 2012 or early 2013, supply and demand should be balanced.”
Ethiopia licensed 36 companies including Lafarge SA (LG), the world’s biggest cement maker, and Dangote Cement Plc (DANGCEM), Nigeria’s largest company by market value, to help it meet a target of producing as much as 27 million tons of cement annually by 2015, Shimeles said. Demand for cement may be met by the end of next year, when the completion of 22 projects takes annual production to 13.5 million tons from 2.7 million tons now, he said.
Ethiopia’s economy expanded an average of 11 percent over the past seven years, International Monetary Fund data shows. The government is targeting growth of as much as 14.9 percent over the next five years. A construction boom in Africa’s second-most populous nation, led by state investment in low-cost housing, roads, dams and universities, has left domestic supply short of demand, which is increasing at as much as 25 percent every year, Shimeles said.
‘Encourage Private Sector’
“We plan to encourage the private sector,” he said. “If there is a gap and the new investor does not come, we will invest. Otherwise it’s open to the private sector.”
Derba Midroc Cement, owned by Ethiopian-born Saudi billionaire Sheikh Mohammed al-Amoudi, plans to start operations at its new 2.5-million ton plant in September, said Chief Executive Officer Haile Assegide.
The expected completion in the next two months of expansions to state-owned Mugher Cement Enterprise and the ruling Ethiopian People’s Revolutionary Democratic Front’s Messebo Building Materials Production Plc will add another 1 million tons, according to Shimeles.
Plant Cost
Al-Amoudi’s plant near Chancho, 70 kilometers (44 miles) northwest of Addis Ababa, cost $351 million and is expected to reach full production capacity in the first quarter of 2012, Haile said in an interview on May 13. The International Finance Corp., the World Bank’s private lending arm, provided $45 million for the project, according to the company’s website.
“We are very confident, unless we have some disaster,” Haile said.
Derba Transport, an affiliate of Derba Midroc, has ordered 1,000 Volvo AB (VOLVB) trucks for $141 million that can each deliver 40 tons of cement to buyers from the factory, according to Haile.
Although it has large, “high-quality” limestone deposits and plentiful water supplies, Ethiopia’s per capita cement consumption of 35 kilograms (66 pounds) per year is very low by international standards, Shimeles said.
“For developing countries cement consumption is an indicator of development,” he said.
Even if the 2015 target is met, the 300 kilograms per capita consumption achieved will still be less than the global average of 390 kilograms, Shimeles said.
To contact the reporter on this story: William Davison in Addis Ababa via Nairobi at pmrichardson@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
abnet June 9th, 2011, 05:29 AM Messob cement factory expansion about to finish :cheers:
Addisfortune.com
Last Updated 06/06/2011
Messebo Aims to Reach Full New Capacity This Month
Commissioning expansion of cement factory to increase daily clinker production by 4,000tn
Following the completion of Messebo Cement Factory’s expansion in March 2011, it plans to complete the commissioning of the expansion work to increase its daily production capacity of clinker with 4,000tn by the end of this month.
The commissioning cost around 2.3 billion Br and is to increase the factory’s current daily production from 3,000tn of clinker to 7,000tn.
Messebo initially commissioned work on the cement factory in 2001, after an initial design study was made by the Tigray Development Agency (TDA). ENKA, a Turkish company, constructed the factory at a cost of 1.3 billion Br.
The factory’s expansion commenced in April 2009 and was completed after 24 months by Hefei Cement Research & Design Institute (HCRDI), a Chinese company engaged in the research and development of cement production technology and equipment.
Haltach Consultancy Co, an Indian company based in New Delhi, was hired as a consultant at a cost of 1.6 million dollars for 20 months after a bidding process.
“Since the completion of the expansion project, the factory has increased its daily production capacity by 900tn,” Haileselassie Beyene, head of public relations at Messebo, told Fortune. “However, unforeseen circumstances like the increase in the price of furnace fuel and other inputs have forced the factory to increase the price of a quintal of its cement from 200 Br to 260 Br.”
The plant was expanded with the belief that the booming construction sector would absorb the products of new cement factories, according to the public relations head of the factory which is located 780km north of Addis Abeba in Tigray Regional State.
“Our location is strategically positioned to cater to the nation’s northern mountainous terrain,” said Haileselassie. “We supply the Amhara and Tigray regional states with cement for irrigation projects.”
Messebo has a projected total capacity to manufacture 840,000tn of cement annually but is working at 75pc of its capacity and would probably produce only 630,000tn of cement this year, according to data obtained from the Ministry of Industry (MoI).
The factory’s client base consists primarily of projects funded by the government in the Tigray, Amhara, and Afar regional states as well as in Addis Abeba.
Mugher Cement Factory, the biggest cement producer in the country, supplies mostly the Oromia and Southern regional states as well as the capital. National Cement Factory, which is located in Dire Dawa Town, supplies mostly the eastern regions, especially Somali Regional State, with cement.
Like Messebo, both Mugher and National Cement are working at 75pc of their capacity with Mugher estimated to produce 657,000tn of cement while National Cement I expected to produce 112,500tn this fiscal year, according to the study by MoI.
Ethiopia’s annual cement demand is expected to increase from eight million tonnes to 27 million tonnes while annual cement production is expected to increase from the current three million tonnes to 13 million tonnes by the end of 2014/15, according to the study that was published in January 2011.
This would leave the country with a shortage of 13.6 million tonnes by the end of 2014/5, according to the data.
Messebo sells its cement whole and is focused on meeting local demand, according to Haileselassie. However, in the near future when new cement factories come online, it would start exporting, he claimed.
As9de from Messebo, Derba-Midroc Cement Factory and Jemma Cement Factory are also carrying out expansion projects, according to a document obtained from MoI.
Upon being completed in 2012, these projects are expected to boost the country’s production capacity by 2.9 million tonnes.
As part of its expansion, Mugher is constructing a new factory around Tatek Military Camp, located 12km west of the capital.
Upon the completion of its expansion projects, Mugher is expected to have an annual production capacity of 1.4 million tonnes of cement by the end of 2014/15, according to MoI, which also pegs the annual production capacity of Messebo at an expected 1.4 million tonnes that year.
The new entrant to the market, Habesha Cement, is expected by MoI to annually produce 790,000tn of cement.
Habesha laid the cornerstone for its cement factory on May 13, 2011, in the Oromia Regional State. Northern Heavy Machinery Industries (NHMI), a Chinese company, was awarded the engineering, procurement, and construction (EPC) contract of the factory, in September 2010.
By ELIAS GEBRESELASSIE
FORTUNE STAFF WRITER
yosef July 16th, 2011, 10:25 PM http://i51.tinypic.com/2v2f8tl.jpg
Coordinates: 9.021957,38.638262 (http://maps.google.com/maps?q=9.021957,38.638262&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&hq=&hnear=0x164c7812a0785f79:0xceaa257029ee19fa,%2B9%C2%B0+1%27+54.89%22,+%2B38%C2%B0+38%27+32.96%22&gl=us&ei=v_QhTqWKBMzksQK9hvWsAw&sa=X&oi=geocode_result&ct=image&resnum=1&ved=0CBYQ8gEwAA)
on New Ambo road, before Menangesha and way before Adis Alem
Im not sure if it is Habesha Cement, I know they have their site near Holeta which should be within that same area (a little further west I believe) but just wanted to confirm if anyone here knows. And if it is Habesha, I had no idea they were this far into construction...
abesha July 17th, 2011, 01:00 AM I think it's Habesha Cement. It's definitely not Midroc since that's on the way to Sululta and it's not the Chinese one because that's down South.
abnet July 17th, 2011, 03:26 AM I think its the new expansion factory of mugher cement factory since it looks like in tatek military camp area.
yosef July 17th, 2011, 09:40 PM Yeah Im suspecting it could be habesha as well, but I forgot all about the Mugher expansion, your right abnet that could be it also:
Preparations are underway to install the clinker production machinery at Mugher, while the cement mill would be installed on 20 hectares of land around the area commonly known as Tatek 10-kms west of Addis Ababa.
Capital (http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=719:mugher-sinoma-sign-over-129-mln-deal-&catid=12:local-news&Itemid=4)
While looking for other ideas, I ran across some other stuff I had forgetten.Apparently, Dangote of Nigeria is planning to build a cement factory as was Lefarge of France. Not sure how far along any of these projects are now though.
Dangote To Invest $250 Million Into Ethiopian Cement Industry (http://ariztos.blogspot.com/2008/09/dangote-to-invest-250-million-into.html)
Lafarge setting up cement plant in Ethiopia (http://www.aggregateresearch.com/article.aspx?id=14884)
LAFARGE TO SET UP 300MLN EURO PLANT IN OROMIA REGIONAL STATE (http://www.intercem.com/ETHIOPIA-LAFARGE-TO-SET-UP-300MLN-EURO-PLANT-IN-OROMIA-REGIONAL-STATE-intercem-cement-conferences-news-5036.aspx)
Anyway I'll probably move this thread to cement development since it fits that topic...
yosef July 26th, 2011, 10:06 PM Lalibela Strives to Meet Cement Demand
Cement factory expects to produce 1.2 million tonnes cement annally.
Lalibela Share Cement Factory, a subsidiary of Tiret Endowment, has started selling shares to the general public on June 30, 2011. The sale of shares will continue until June 30, 2012, it announce.
Lalibela has made a public offering of 246,000 shares, with each share valued at 5,000 Br, with the aim to raise 1.2 billion Br. A minimum of three shares must be purchased, and the maximum number of shares that can be purchased is 52,800 shares. Lalibela plans to raise 880 million Br, 40pc from bank loans, and 1.3 billion Br, 60pc through the sale of shares, to reach a target of 2.2 billion Br.
The company’s prospectus touts that shareholders can expect a return of 2,130 Br in yearly profits for every 5,000 Br in shares, as earnings are predicted to be no less than 563 million Br in yearly profits. Share purchases must be made in three phases, with 40pc of the share payments paid initially, 30pc paid in six months, and the final 30pc should be paid in the third and final phase, according to Lalibela.
The cement factory will commence construction on June 2012 in Dejen, 229 km from Addis Abeba, on a 3,000ht plot of land. The factory envisions producing 1.2 million tonnes of Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC) in Dejen, on an annual basis.
“The raw materials will be local because of the factory proximity to the Abay Gorge, which has an abundence of limestone,’’ according to Serawit Amene, general manager of Lalibella Cement.
The project requires 928,200tn of limestone, 163,800tn of clay, 252,000tn of pozollan, and 84,000tn of gypsum, which can easily be found in the region. When operation is in full capacity, it will create jobs for 380 employees, the company claims.
The country’s demand for cement is currently higher than 11 million tonnes, and yet there was a 8.8 million ton gap between the demand and supply in 2011. The GTP target for 2015 is to increase production capacity to 27 million tonnes.
Cement production in the country is currently handled by 11 companies, which produced a total of 2.2 million tonnes in 2009/10, according to research conducted by Ministry of Industry (MoI) in 2010. The consumption of cement has increased by an average of 30pc in the four years before 2009, according to the research.
State owned Mugher Cement, Messebo, owned by the Endowment Fund for the Rehabilitation of Tigray (EFFORT), and National Cement, a private company, are the top three producers.
The factory will start full capacity production in 2014, after having an international auction for the supply and instalment of the machines. ‘'The main vision of this factory is to contribute to the supply of affordable cement, which is hard to find in the country,’’ according to Serawit.
By HADRA AHMED
Fortune (http://www.addisfortune.com/Vol_10_No_585_Archive/Lalibela%20Strives%20to%20Meet%20Cement%20Demand.htm)
yosef October 1st, 2011, 07:42 PM Muger receives instruction to build a new cement factory
Saturday, 17 September 2011 09:33
By WUDINEH ZENEBE
Muger Cement Factory has been instructed to build a new cement factory by the Ministry of Finance and Economic Development (MoFED). The new factory will have the capacity of producing double what it is currently producing. MoFED ordered the building of the new factory after Muger finalized the expansion project it was undertaking in June 2011 which is expected to have a total production capacity of 1.7 million tons.
The new factory is expected to have double the present production capacity.
[..]
continued at Reporter (http://www.thereporterethiopia.com/News/muger-receives-instruction-to-build-a-new-cement-factory.html)
also posted a video about the completed expansion in post #10 (http://www.skyscrapercity.com/showpost.php?p=77843559&postcount=10) (although the vid doesnt seem to be working at the moment)
yosef October 1st, 2011, 07:46 PM Habesha Cement signs loan agreement for new factory
deal sealed
http://www.thereporterethiopia.com/images/resized/images/stories/webpix/786/786-news2_200_200.jpg
Pictured above are Mesfin Abi (Eng.), CEO of Habesha Cement and Tadesse Hatiya.
Habesha Cement became the recipient of the largest loan extended by the Development Bank of Ethiopia (DBE) to a single project from the private sector when it signed a 1.52 billion birr loan Friday at the Intercontinental Hotel.
[..]
continued at Reporter (http://www.thereporterethiopia.com/News/deal-sealed.html)
enkelfam October 6th, 2011, 03:07 PM Nigeria's Dangote to build cement plant in Ethiopia
ADDIS ABABA (Reuters) - Nigeria's Dangote Group, which has seen a rapid expansion on the continent, has signed an agreement to set up a $400 million cement plant in Ethiopia, state media said on Thursday.
The deal was signed on Wednesday between Dangote's president and CEO Aliko Dangote and officials from the Ethiopia's Oromiya region, where the plant will be constructed with an aim of producing two million tonnes per year.
The project is scheduled to be finalised in two years time, Ethiopian Television said in a report.
Dangote, Africa's most successful businessman, controls about two-thirds of the Nigerian cement market and seeks to expand his interests in the world's poorest continent.
Dangote has also invested in Ghana's 1.2 million tonnes per year Tema Cement Factory, and other plants in Senegal, Zambia, Tanzania, Democratic Republic of Congo and Equatorial Guinea.
http://af.reuters.com/article/idAFJOE79508520111006
abnet November 23rd, 2011, 04:20 PM Mugher and Messebo reduce the price of cement,asked the Government to stop importing cement :cheers:
Addisfortune.com
Published On Nov 20, 2011
Mugher, Messebo Ask Gov’t to Stop Importing Cement
State owned Mugher claims it is sitting on a mountain of cement, plans to reduce price, supply to
public
Mugar Cement and Messobo Cement factories have sent letters to the Ministry of Finance & Economic Development (MoFED) requesting that the government hold import of cement claiming they can produce enough to meet its demand.
Both companies, which have finished their respective expansion plan adding a combined 1.7 million tonne to their annual production of 1.4 million tonne, sent the letter copied the letter to the Ministry of Industry (MoI) last week.
With a huge infrastructure planned and local cement factories unable to meet its demand the government has been importing cement in a competitive bid through the Public Procurement and Disposal Agency (PPDA) established in 2010. Concluding a contract with Italian and Israeali companies, the PPDA purchased 400,000tn of Ordinary Portland Cement (OPC) at a cost of 34.6 million dollars in August, 2011. Out this 250,000tn has already arrived at Djibouti port. The cement is intended to be used for the construction of housing projects, road and sugar factory.
However both the state owned Mugher and Messebo, which was established in 2001 and has its plant in Mekele, 780km north of Addis Abeba in Tigray Regional State, claim they have enough supply in stock.
“We are sitting on the mountain stock,” an official of Mugar, who is not authorized to comment, told Fortune.
The national demand for this fiscal year was estimated to be around eight million tonnes, including the 213,941tn demand for the Renaissance Dam, according to a recent study conducted by the Ministry of Industry (MoI). This is 5.8 million tonne less than the estimated demand set in the five-year Growth and Transformation Plan (GTP) and three million tonnes less from the demand last year.
In a complete turnaround of a trend in the cement sector, capacity of factories and supply has increased while demand went the other way. The number of factories with a production capacity of three million, which were trying to meet the 11 million tonne demand last year has gone up to 15 with a capacity of 7.8 million tonne. There are five companies set to enter into production this year bringing the total supply to 12.6 million tonne.
Notable among them is Derba Midroc, a 351 million dollar factory, located 70km outside the capital in Sululta Town of North Shoa Zone, Oromia Regional State. It is set to start production in January 2012 initial daily production of 1,800tn.
While demand is decreasing, the price of cement has also seen a major decline with bag of 50k cement being sold at an average of 300 Br. This is significant decrease from the 500 Br price tag in May and April this year.
However, there is no clear reason why demand has decreased while experts venture different theories.
Some experts argue that private sector construction has decreased due to the price of reinforcement bars, which are complementary with cement, increasing by at least 70pc.
Trade is also another factor, according to Tsedeke Yihunie, manager of Flinstone Engineering.
“This might be due to the steps taken to formalize trading,” he told Fortune. “As people slowly adapt to the change trade slows down reducing the rate at which money changes hand.”
However, there needs to be a research done to exactly know what is affecting the demand side, according to an expert at the MoI, who is not authorized to comment.
“But it is likely that there is more supply than demand,” he told Fortune.
This decline has become worrisome for Mugher, which until recently limited its supply to the privates sector by supplying to the government.
It is revising it market strategy and planning to open its doors to the private sector, according to the source in Mugher. The factory used to prioritizes its supply for government projects, investors, real estate developers and NGOs respectively.
“The board of the factory is to meet on Monday, November 21, 2011, to make a decision on the matter,” the source told Fortune. “There will also be a discussion on reducing price.”
A 50kg-bag of Mugher cement was selling for 355Br in the market while Messobo’s price stood at 320 Br on Wednesday, November 16, 2011.:banana:
By MAHLET MESFIN
FORTUNE STAFF WRITER
http://addisfortune.com/Mugher,%20Messebo%20Ask%20Gov%E2%80%99t%20to%20Stop%20Importing%20Cement.htm
Same news with the factories approving the price reduction on cement in amharic
ሙገርና መሰቦ የሲሚንቶ ሽያጭ ዋጋ ቀነሱ
Wednesday, 23 November 2011 09:44
ሙገርና መሰቦ ሲሚንቶ ፋብሪካዎች የማስፋፊያ ፕሮጀክቶቻቸውን አጠናቀው ወደ ምርት መግባታቸውን ተከትሎ፣ በሲሚንቶ ዋጋ ላይ ቅናሽ ማድረጋቸውን አስታወቁ፡፡ ቀደም ሲል ሙገር ላይ 330 ብር የነበረው አንድ ኩንታል ፒፒሲ ሲሚንቶ የ72 ብር ቅናሽ ተደርጎበታል፡፡ በዚህ ቅናሽ መሠረትም ከሰኞ ጀምሮ 258 ብር በመሸጥ ላይ ይገኛል፡፡
ይኼው የሲሚንቶ ዓይነት ታጠቅ አካባቢ 345 ብር የነበረው 266 ብር፣ አዲስ አበባ ላይ 350 ብር የነበው አሁን 278 ብር እንዲሆን ተደርጓል፡፡
ኦፒሲ የተሰኘው የሲሚንቶ ዓይነት ሙገር ላይ 396 ይሸጥ የነበረው ሲሆን፣ አሁን ወደ 330 ብር ወርዷል፡፡ አዲስ አበባ ላይም 350 ብር በኩንታል እንዲሸጥ የሙገር ማኔጅመንት ወስኗል፡፡
የፋብሪካው የፕሮጀክቶች ዳይሬክቶሬት ዳይሬክተር አቶ ኤልያስ ክፍሌ ለሪፖርተር እንደገለጹት፣ ሙገር የማምረት አቅሙ በመጨመሩና ዘመናዊ የአመራረት ዘዴ በመጠቀም ከፍተኛ ምርት እያመረተ በመሆኑ ዋጋ መቀነስ አስፈልጓል፡፡
ሙገር ከማስፋፊያ ፕሮጀክቱ በፊት በዓመት 870,000 ቶን የነበረውን የማምረት አቅም ወደ 2.2 ሚሊዮን ቶን አሳድጓል፡፡ ሙገር የማምረት አቅሙ በ15.0 በመቶ ማደጉን አስታውቋል፡፡
እንደ ሙገር ሁሉ የማስፋፊያ ሥራዎች ሲያካሂድ የቆየው መሰቦ ሲሚንቶ ፋብሪካ በምርት ዋጋ ላይ ቅናሽ አድርጓል፡፡ መሶቦ ሲሚንቶ በኩንታል 260 ብር ይሸጥ የነበረውን ፒፒሲ ሲሚንቶ 200 ብር፣ 330 ብር ይሸጥ የነበረውን ኦፒሲ ሲሚንቶ ደግሞ 280 ብር መሸጥ ጀምሯል፡፡ መሰቦ ሲሚንቶ የማምረት አቅሙ ከሙገር የሚተካከል ሲሆን፣ የማምረት አቅሙን ከ850 ሺሕ ቶን ወደ 2.2 ሚሊዮን ቶን ማሳደጉ ታውቋል፡፡
እነዚህ ሁለት የአገሪቱ ግዙፍ የሲሚንቶ ፋብሪካዎች የማስፋፊያ ፕሮጀክቶቻቸውን ካከናወኑ በኋላ የዋጋ ቅናሽ እንዳደረጉት ሁሉ፣ መንግሥት ከውጭ ሲሚንቶ ከማስገባት እንዲገታም ጠይቀዋል፡፡
አቶ ኤልያስ እንደገለጹት፣ የዕድገትና የትራንስፎርሜሽን ዕቅድ ዘመኑ ሲጠናቀቅ ይደረስበታል የተባለውን ያህል ባይሆንም፣ የአገር ውስጥ የሲሚንቶ አቅርቦት ጨምሯል፡፡ በመሆኑም መንግሥት የሲሚንቶ ፍላጐቱን ከአገር ውስጥ ብቻ እንዲያሟላ ጠይቀዋል፡፡
በ2003 ዓ.ም. የአምስት ዓመቱ ዕቅድ ሲታቀድ የአገሪቱ ሲሚንቶ የማምረት አቅም 2.7 ሚሊዮን ቶን ብቻ ነበር፡፡ ዕቅዱ ከዚህ አቅም በአሥር ጊዜ የሚበልጥ 27 ሚሊዮን ቶን ሲሚንቶ በአገር ውስጥ ለማምረት ዕቅድ ይዟል፡፡
http://www.ethiopianreporter.com/news/293-news/4189-2011-11-23-06-44-49.html
Yoniii November 23rd, 2011, 07:05 PM So we will meet the demand by next year, meaning no more expensive Pakistani cement. More for export! :)
abnet December 20th, 2011, 04:17 AM Seems like more smaller cement factories also joining the cement market :cheers:
Cement industry sees dramatic expansion
By Elias Gebreselassie
Monday, 19 December 2011 08:39
Seven new major cement projects are on the way this year. Five new factories will be completed and two existing ones will be expanded. This will mean an additional 4.8 million tons of cement for Ethiopia.:applause::applause:
For this year the factories will be at 65 percent of capacity and will be able to make 1.3 million tons of cement by the end of the current fiscal year.
The government estimates that by July 7, 2012 the country’s cement potential supply will reach 12.61 million tons. The combined estimated production for 2011/12 including from the new factories shall be 6.64 million tons.
The actual demand for the cement, including the 216 thousand tons of cement needed for the Grand Renaissance Dam construction, is still expected to be 1.3 million tons higher than the production capacity.
Derba MIDROC cement’s main factory will begin operating in January 2012 and the National Cement Expansion projects located in Oromia and Dire Dawa that are expected to begin next May are the two largest projects.
C.H. Clinker manufacturing PLC, Ethio-Cement, Ture Dire Cement are the other new factories.
Jimma Cement factory is also being expanded. Derba MIDROC Cement will have other factories that it owns expanded as well; these are known as Dejen third and fourth phase projects and they are the smaller part of the Derba MIDROC cement corporation located in Amhara regional state.
In total the projects are expected to add a capacity of eight million tons of cement annually from the current about 4.63 million tons produced by the existing factories.
In total there are 37 facilities that produce cement in Ethiopia. Fourteen are from local investors, one is a joint venture between a local and foreign firm and the rest are foreign based investments. Out of the 37 cement projects 34 of them are new cement projects.
The Ethiopian government plans, by the end of the Growth and Transformation Plan in 2015, to increase the cement production to 27 million tons of cement annually to meet Ethiopia’s cement needs. This is happening at a time when the per capita cement consumption is increasing from the current 35Kg per person to 300Kg per person.
It also plans to make operational by 2015 four cement expansion projects and eight new cement factory projects.
http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=169:cement-industry-sees-dramatic-expansion-&catid=54:news&Itemid=27
Ahadu December 20th, 2011, 05:34 AM Looks like that every region will have at least one cement factory. Amazing!
Oromia and Dire Dawa
Jimma Cement factory
Dejen third and fourth phase projects -Amhara regional state.
Skyliner123 December 20th, 2011, 09:13 AM Ahadu,
I'm glad you came out of the 'kumsatin'....LOL
Ahadu December 20th, 2011, 10:10 PM Ahadu,
I'm glad you came out of the 'kumsatin'....LOL
Coming out from the "kumsatin" / closet....shiiit- didn't know that I look like gay.
Roha December 20th, 2011, 10:22 PM Coming out from the "kumsatin" / closet....shiiit- didn't know that I look like gay.
:lol::lol:
Arero December 23rd, 2011, 05:44 PM Looks like that every region will have at least one cement factory. Amazing!
Oromia and Dire Dawa
Jimma Cement factory
Dejen third and fourth phase projects -Amhara regional state.
Jimma is in Oromia. Dire too, practically speaking.
I don't know of any cement factory project in the Somali region or SNNP.
Skyliner123 December 23rd, 2011, 07:28 PM Jimma is in Oromia. Dire too, practically speaking.
I don't know of any cement factory project in the Somali region or SNNP.
Major investment projects such as this have to take the region's geographic aspects into concideration. For example, while SNNPS and Benenshangul do not yet have major cement factories, they will soon be the site of the nation's (in fact, the continent's) largest hydroelectric dams. Somali, Afar, and Gambela regional states, on the other hand, have what will be the nation's largest petrolium extraction/processing plants.
Yoniii January 4th, 2012, 08:36 PM Cement Prices Falling in Ethiopia
The price of one quintal of cement, in Ethiopia, has recently fallen to 240 birr from previous highs of 500 birr and above according to Shimeles Wolde Director of the Chemical Industry Development of the Ministry of Industry.
The cost of cement has seen significant decrease with the rise of the number of cement factories to fifteen explained the Ministry of Industry.
A total of 5.3 million tons of cement is currently being supplied to the market with annual national cement production reaching 7.84 million tons said Shimeles.
It is to be remembered that Ethiopia issued a stay on licensing for foreign investment in cement projects. The Ethiopian government will not accept applications for the construction of new cement factories according to an instruction from the Ministry of Industry to the Ethiopian Investment Agency.
The ban was put into to place to avoid unnecessary competition according to Shimeles. There are currently above forty cement companies licensed to operate in Ethiopia said Shimeles.
Twenty Two cement companies are actively engaged in either the construction of factories or have commenced operations explained Shimeles. The priority at this point is to support companies that have not began active operations although fully licensed he noted.
The decision to put a hold on further licensing was put in effect with this end in mind he added.
Source: Ethiopia News Agency
http://www.2merkato.com/20120104746/cement-prices-falling-in-ethiopia
Roha January 10th, 2012, 05:15 AM Debra Cement factory Documentary
http://www.ethiotube.net/video/17332/Documentary--Al-Amudis-New-Derba-Cement-Factory-Building-Tomorrow-Today
DZman January 10th, 2012, 05:56 AM ^^
that is a beautiful video man, thanks for sharing
abesha January 16th, 2012, 06:38 PM Ethiopia to Export Cement
The Ethiopian Ministry of Industry has approved a request by Mugher Cement Enterprise to export cement from Ethiopia to neighboring countries.
The approval letter is soon expected to be delivered to the enterprise signed by Mekonnen Mayazewal Minister of Industry.
The permit to export cement is good news for Mugher as the enterprise would have found it hard to service debts otherwise according to an anonymous insider.
The cement enterprise is opting to export in the face of dropping demand and increasing stock according to sources.
The next step to facilitate the export of cement will be acquiring an export permit valid for the next year and to be renewed annually.
A primary market targeted by the cement enterprise is said to be South Sudan with a booming construction industry financed by the oil revenue.
The export will be facilitated through trading houses such as BFYB which is licensed to operate as an importer and exporter in South Sudan according to sources.
Mugher’s scheme to export cement will only remain viable until there is an increase in demand locally to meet the supply.
Exports will be stopped immediately with an increase in local demand said an official at the Ministry of Industry.
Mugher will also remain as a primary supplier to government infrastructure projects.
It is to be remembered that The price of one quintal of cement, in Ethiopia, has recently fallen to 240 birr from previous highs of 500 birr and above according to Shimeles Wolde Director of the Chemical Industry Development of the Ministry of Industry.http://www.2merkato.com/20120116787/ethiopia-to-export-cement
developingfan January 21st, 2012, 08:01 PM does anyone know if asbestos is used in any of these cement facilities?
Vildana February 2nd, 2012, 08:58 PM New cement factory East Cement , on the way to Abbay bridge http://www.flickr.com/photos/74561619@N02/6796707761/in/photostream
abesha February 2nd, 2012, 09:18 PM Nice find Vildana. Never even heard of this cement factory. This is exactly how it should be - we shouldn't be able to name every factory that exists in the country just off the top of our heads :lol:
yosef February 2nd, 2012, 09:20 PM Nice find Vildana. Never even heard of this cement factory. This is exactly how it should be - we shouldn't be able to name every factory that exists in the country just off the top of our heads :lol:
lol, I agree.
Vildana you must of have been busy, qudos for giving us so much to see. :applause:
Vildana February 2nd, 2012, 09:53 PM Glad you liked it , have some more pictures to post ,but reached my acc. limit, have to wait a while to post it.
yosiast February 3rd, 2012, 02:33 AM New cement factory East Cement , on the way to Abbay bridge http://www.flickr.com/photos/74561619@N02/6796707761/in/photostream
That's a Chinese-owned factory. It's the sole supplier to all the major Chinese contractors in the country and apparently sells the cheapest (prince wise) cement in the country.
rasta55 February 3rd, 2012, 03:00 AM Quote:
Originally Posted by Vildana View Post
New cement factory East Cement , on the way to Abbay bridge http://www.flickr.com/photos/7456161...in/photostream
That's a Chinese-owned factory. It's the sole supplier to all the major Chinese contractors in the country and apparently sells the cheapest (prince wise) cement in the country.
I looks very similar to Derba Cement (which is 25 km off of the Addis - Abbay Bridge Road)
http://img35.imageshack.us/img35/616/midrocderbacementfactor.jpg
http://img848.imageshack.us/img848/616/midrocderbacementfactor.jpg
Vildana February 3rd, 2012, 01:28 PM Derba is much bigger than east cement , at the enterance of the factory its written East Cement.
rasta55 February 3rd, 2012, 08:44 PM Derba is much bigger than east cement , at the enterance of the factory its written East Cement.
Derba hired a chinese firm to design/build the factory, which might explain the resemblance (at least the outside appearance)...
abnet March 12th, 2012, 07:47 PM Chinese company to construct 244 million birr (14 million US Dollars) cement factory
Saturday, 10 March 2012 06:14
By MERGA YONAS
Qiantang In china Cement Product Plc, a Chinese company, is to construct a cement factory with a capital of 244.10 million birr in Ada’a Barga district of West Showa zone, Oromia Regional State. According to a letter written on December 30, 2011, the Investment Board of Oromia said it had approved a request by the company to be granted 24.33 hectares of land to build the cement factory.
In its letter the board instructed the company to pay 6,258,884.62 birr in compensation to relocate 39 farmers residing in the area. The Oromia Investment Commission will hand over to the company the requested land as soon as the compensation payment was effected and the necessary agreement was signed within 15 days starting from the day it was approved, the letter stated.
According to Kabba Hunde, Director General of the Investment Board of Oromia, the company has already paid the compensation and signed the agreements as well.
“The board expects the project to commence within six months,” Kabba told The Reporter.
Currently, about 25 local and foreign companies are registered in the country to engage in cement production. Eight of them have already commenced operation. When all the companies begin production they are expected to satisfy the increasing demand for cement in the country. Presently there is a significant gap between demand and supply.
http://www.thereporterethiopia.com/News/chinese-company-to-construct-244-mln-birr-cement-factory.html
abnet September 23rd, 2012, 02:15 AM Inchini looks to export cement to South Sudan .
Addisfortune.com
Published On September 16, 2012
Local Market Compounded by Government Import
While exporting cement did not seem to be rewarding for the mega cement factories, the Chinese based Inchini Bedrock Cement Factory is bidding to secure export permits eying markets in neighboring countries.
The factory turned its face to this market following the slump in demand in the local market that has made them perform at 52pc capacity, according to Daniel Ganyi, operations manager of Inchini. The factory, which has the capacity to produce 300,000tns on annual basis, is among the 11 small-scale factories with an annual production capacity of less than 750,000tns.
The company says that it has found market in South Sudan and Kenya.
“We have contacted three customers with whom we are negotiating so far,” Daniel said.
Although the government of South Sudan is said to direct millions of petro dollars into the construction industry, an earlier attempt by Messebo Cement Factory was challenged when a truck on its way to South Sudan got stuck in a muddy road, where it remained for two months, according to a senior manager at Messobo.A poor infrastructure did not allow us to export more than 2,000ql to south Sudan four months ago. "We don't call this import, it is a sample."
“It is very costly,” the manager said.
Although managers of Inchini have concerns over their competitiveness, they are positive that the shifting gears of their marketing strategy will workout for the better as they almost lose hope in the local market. The scenario here, according to Daniel, is different from any other country where demand is highly associated with the price.
“Here we learnt that it is not about the price; even if we make it 10 Br, it might not attract demand,” Daniel said.
The sudden drop in demand started around June 2011, when cement factories supplying to the market grew from 11 to 15. The production capacity also increased from 2.5 million tonnes to 7.8 million tonnes a year. The price of a quintal is now down from 500 Br, around which it had hovered for the past five years, to 300 Br, the maximum now. Inchini’s cement is selling for 220 Br, down from 340 Br a year ago.
An expert at the Ministry, however, doubts the company’s success on export arguing that the price of the factory is still higher than the international price. A quintal of cement is sold at 213 Br in the international market in August 2012, according to Global Cement Manufacturers Association. “Of course we cannot compete with the Pakistani’s cement since we going to add transportation cost over our already high price,” Daniel admitted. Pakistan which has been exporting cement to Ethiopia for decades is one of the major cement producer and exporter countries in the world.
Aiming to increase the competitiveness of local cement factories globally, the ministry is conducting a study in order to incentivize the sector, according to sources. “They informed us that they will announce the new incentive scheme within two the next months,” Daniel said.
The recent trend of surplus however, seems to continue further in this fiscal year as well, as the government projection shows that there will be eight million tonnes of cement in this fiscal year while demand is five million tonnes, showing a three million tonne surplus. On the top of the 15 companies, additional five new companies are also expected to join the market.
The situation is compounded by government import of 27,000tns of cement, which is coming under obligation of an earlier contract made in 2011. This was part of a purchase of 400,000tns the government ordered in October 2011 for the housing projects by the Public Procurement and Disposal Agency (PPDA).
By MAHLET MESFIN
FORTUNE STAFF WRITER
http://addisfortune.net/Inchini%20Looks%20to%20Export%20Cement%20to%20South%20Sudan.htm
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