Displaying items by tag: Ethiopia
Ethiopia in focus
10 June 2015Just one week after Dangote started trial production at its new Mugher cement plant in Ethiopia it announced that it would be doubling capacity at the site. Upgrade work is slated to begin before the end of 2015, according to Nigerian media.
The move shows how much potential Ethiopia is seen to have for the cement industry. With a population of around 90m, it had a cement production capacity of 9.7Mt/yr before the new 2.5Mt/yr Dangote plant comes on line, according to Global Cement Directory 2015 figures. Including the new Dangote plant and even at 100% capacity utilisation this would place cement consumption in the country at 135kg/capita. This is a low figure internationally and hence the continued interest in new capacity. Subsequently, a large number of projects have been rumoured and mooted in Ethiopia over the years. However, many of these publicised projects then fail to make it to construction.
Mebrahtu Meles, the Minister of Industry, said that there were 18 companies engaged in cement production at the 7th Africa Cement Trade Summit that took place in Addis Ababa in April 2015. Meles placed the installed production capacity at 11.2Mt/yr (including the Dangote plant) with the expectation that this will increase to 17.15Mt. However, these cement plants are only producing 5.47Mt/yr, giving the country a capacity utilisation rate of below 50%. This too is low by international standards (60% or more). Cement consumption was placed at just 62kg/capita in 2014.
At the same event, the Ministry of Industry revealed that it was working on a national Cement Industry Development Strategy from 2015 to 2025. The strategy will tackle local industry issues such as unavailability of locally-produced packaging materials, poor transport links, high costs of production and a limited market. Key targets include stimulating cement demand to 12.22Mt/yr by 2020 by moving to concrete road construction and raising capacity utilisation rate to 75% by 2017 and to 80% to 2025.
Despite the publicity Dangote isn't the only player creating new capacity in Ethiopia. Habesha Cement is set to open its 1.4Mt/yr cement plant near to Addis Ababa in 2016. Habesha also has an international angle, given that South African cement producer PPC purchased the majority stake in Habesha Cement in the autumn of 2014 following the project's difficult financial history.
The new Dangote plant predates the country's new cement industry strategy but the upgrade plans demonstrate confidence in both the market and the government's plans. To meet its targets though the country is going to need to increase both its capacity utilisation and build more production capacity. Although muted from previous pronouncements the current target relies on Habesha Cement building its plant and the capacity utilisation rate rising from 50% to at least 75%.
South African weekly newspaper, M&G Africa, has described how Africa faces an infrastructure 'apartheid' whereby 44 of the continent's 58 countries share just 25% of the continent's infrastructure. Building things in Africa costs more because of this infrastructure deficit and it hits cement capacity utilisation rates as well. Ethiopia is one of the region's richer countries in terms of gross domestic product (GDP) but the same issues apply. Hitting its targets for the cement industry may be hard.
Dangote to expand Ethiopian cement plant
09 June 2015Ethiopia: Accoring to Nigeria News, Dangote Group president Alhaji Aliko Dangote has said that 'plans are afoot' to double the capacity of the newly-opened US$500m, 2.5Mt/yr capacity cement plant in Mugher, Oromia, Ethiopia. Dangote said that the expansion work would begin before the end of 2015.
The decision to set up and then expand the plant was informed by the 'enabling' environment created by the Ethiopian government with massive investment in several large-scale infrastructure projects, including the construction of the continent's largest hydropower dam. The Ethiopian plant will create direct employment for 2000 people in the main plant operations and logistics, with a fleet of 600 trucks. 5000 indirect jobs will also be created.
Dangote said that achieving real economic integration in African would require political stability and a breakdown of the barriers and borders between countries, which hinders free flow of goods, services and people. "We need to make deliberate efforts to encourage Africans, not just foreigners, to invest in Africa. Dangote Cement is currently in 16 African countries with plans to invest in many more over the next years. There are a number of other successful pan-African brands today such as MTN, Shoprite and Ecobank," said Dangote. "We need to encourage this trend to see more investments in Africa by Africans. Above all, there is need to encourage the private sector to collaborate with governments across Africa to address the issue of infrastructure deficit, which has plagued the continent for decades."
Ethiopia's prime minister Hailemariam Desalegn said that as one of the fastest growing economies in the world, the country's investment potential had barely been scratched. He said that the government was spending millions of dollars on critical infrastructure to address investment and align with policies that were already in place to aid investors. "Ethiopia represents a lucrative market that has barely been tapped with its 95 million people and growing economy," said Desalegn.
Ethiopia's Minister of Industry, Ahmed Abitew, said that, with the new plant, the country's cement sector would make significant growth in meeting local demand, which has grown due to infrastructural development. According to him, production has risen from 11.2Mt/yr to 17.5Mt/yr. "The government is giving due attention to the industrial sector with its average growth of 20%/yr," said Abitew.
Dangote Cement begins trial production in Ethiopia
02 June 2015Ethiopia: Dangote Cement, which entered the cement sector in Ethiopia with an investment of US$600m, began trial cement production at its new 2.5Mt/yr capacity plant in May 2015. The plant, which received its licence from the Ethiopia Investment Commission on 8 September 2008, is located at Muger in Adebern Wereda, Oromia. Dangote has started work with 1000 employees.
Dangote Cement has imported 1.2m packaging bags from Egypt, with more to be imported soon. Twenty-three heavy trucks imported for transport have also arrived at the port in Djibouti, with a duty free privilege provided by the government to the company, said Mesfin Abera, Dangote's sales and marketing manager in Ethiopia. The company will import a total of 600 trucks.
According to data obtained from the Ministry of Industry's Cement & Related Industry Development Institute, cement demand in Ethiopia is expected to reach 10.6Mt/yr in 2017.
Dangote Cement to start Ethiopian production in May 2015
20 April 2015Ethiopia: Dangote Cement's new cement plant in Ethiopia will open in May 2015. Minister of Mines, Tolosa Shagi visited the plant and commented that new plants and upgrades to existing plants will enable Ethiopia to meet local demand, according to local media. The new cement plant in Oromia cost US$400m and it will have a cement production capacity of 2.5Mt/yr making it one of the largest in East Africa.
Currently, cement demand in Ethiopia is estimated to be around 7 – 8Mt/yr with cement production at 5.4Mt/yr. Once fully operational the Dangote Cement plant is hoped to raise the country's cement production to 8Mt/yr.
Ethiopia: Aliko Dangote will inaugurate east Africa's biggest cement plant in Ethiopia in the next three weeks, between 29 March 2015 and 2 April 2015.
Dangote Cement Ethiopia plc has built the state-of-the-art cement plant in West Shoa Zone, Adaberga woreda. Construction by China's Sinoma International Engineering commenced in March 2012 and was completed in March 2015. Products of the US$500m plant will be available locally from May 2015. The plant has 2.5Mt/yr of cement production capacity. Teshome Lemma, country general manager of Dangote Cement, said that the fully-automated plant is the biggest in the east African region. It will produce Ordinary Portland cement, Pozzolanic Portland cement and special cement for dam construction.
According to Lemma, all of the equipment was procured from Germany, Sweden and Italy. "The plant has state-of-the-art cement technology and it produces world class cement that can be sold any where in the world," said Lemma. "The plant is environmentally-friendly. There is no smoke coming out of the plant as the latest pollution controlling technology is applied."
Egypt/Ethipopia: ASEC Engineering and Management, a subsidiary of Egypt's Qalaa Holdings, has signed a one-year plant management agreement with Ethiopia's National Cement Share Company.
As per the deal, Asec will provide full technical assistance to National Cement Share Company for the operation and maintenance of the 1Mt/yr capacity cement plant. ASEC will also utilise its know-how and expertise to help National Cement Share Company to boost production volumes, cut production costs and improve product quality. Under the contract, ASEC will also introduce and implement systems for all aspects of production, quality, maintenance, warehousing and human resources, among other areas.
"This is a result of the continued efforts of ASEC Engineering and its ambitious plans to expand its business into Sub-Saharan Africa after its successful contract with Cimento Nacional Company in Mozambique," said ASEC Engineering CEO Khaled El Sebaie.
Qatari investors plan US$500m cement plant in Ethiopia
26 January 2015Ethiopia: A Qatari business group plans to invest US$500m in Ethiopia. The group met with Ethiopia's president to discuss their investment plans, which include a cement plant in Dire Dawa, as well as other industrial facilities. No specifics have been announced as to the capacity of the cement plant.
Ethiopian ministry releases strategy to increases cement consumption to 20Mt/yr by 2025
22 December 2014Ethiopia: The Ministry of Industry has released a draft Cement Industry Development Strategy that intends to increase domestic cement consumption to 20Mt/yr by 2025. Around US$30m will be required to realise the strategy plan that will include providing support to cement plants and overcoming the general shortage of cement in the country. The draft strategy was prepared by the Adama Science and Technology University and has been discussed by stakeholders. At present Ethiopia consumes 6Mt/yr of cement.
PPC increases stake in Habesha Cement to 51%
05 November 2014Ethiopia: South African cement producer PPC has acquired Industrial Development Corporation's 20% stake in Ethiopian-based Habesha Cement for a purchase consideration of US$13m. PPC's initial 27% stake in Habesha, acquired in July 2012, now rises to 51%, while the balance of the shareholding in Habesha is held by around 16,000 local shareholders.
"We are very excited about our increased investment in Ethiopia; a country with a population of 91 million people that is set to reach 100 million by 2018 and having a growth rate that is expected to remain above 8% in the medium term," said Bheki Sibiya, Executive Chairman of PPC.
Habesha has begun the construction of a 1.4Mt/yr cement plant 35 km north-west of Addis Ababa. The project has cost approximately US$135m and commissioning is planned for 2016. In addition to the Habesha project, PPC has started building projects in Rwanda, the Democratic Republic of Congo and Zimbabwe.
Financial closure of this acquisition is expected in December 2014 once all conditions have been satisfied.
Ethiopia: The Ministry of Mines (MoM) has granted a mining license to Habesha Cement for the excavation of minerals for the company's cement production.
The contract allows Habesha to mine limestone, gypsum, clay and sandstone from 1.12km2 of land in the West Shoa Zone, Oromia Region, at four different locations. The mining operations will be undertaken with a capital of US$1.38m. The land that Habesha requested for pumice is reserved for forestation and wildlife development and it has asked for a replacement.
The mines will provide raw materials for the Habesha cement plant, which will have a production capacity of 1.4Mt/yr of cement. The company is expected to begin production in November 2015.
The mining contract will be valid for 60 years, until the minerals are fully excavated. Habesha is expected to produce over 100Mt of limestone in that time. When the company starts cement production, it is expected to use 1.1Mt/yr of limestone, 70,000t/yr of gypsum, 288,000t/yr of clay, 72,000t/yr of sandstone and 450,000t/yr of pumice.
"To get the approval, we conducted a feasibility study and environmental assessment on the areas and paid US$1.55m as compensation to the former owners of the land," said Mesfin Abi, CEO of Habesha.
Habesha Cement was established in September 2008 by 30 shareholders with an initial capital of US$30,671. Construction of the cement plant, which will cost US$120m, is underway in Beketa and Koro Odo Kebele, Oromia Region, Ethiopia.