An Indian company is competing against four Chinese firms for an US$80m contract for the construction of the Habesha Cement factory that will help to ameliorate some of its chronic shortage in the East African nation.

Nine companies had initially emerged when the company requested expression of interest for engineering, procurement and construction. Then, six companies responded to the bid deadline February 22. One company was disqualified after it failed to provide bid security.

The final shortlist was of four Chinese companies and one Indian firm.

"Walchandnagar Heavy Industries, the Indian company, which has been working in the sugar industry, is venturing into the cement industry for the first time" Mefsin Abi, general manager of Habesha said.

Of the four Chinese companies, Sinoma International and CDI-Changdu Cement Research Institute are already involved in the installation of machinery for the expansion project of Mugher Cement Factory. The other two, Hefei Cement Research Institute and Northern Heavy Industries, are undertaking similar projects for Messobe and National cement factories, respectively.

The project is expected to take 22 months, according to the general manager.

The technical and financial evaluations will be completed and the result will be announced within three months. The company will select the firm to do the consultancy work for the EPC within two weeks, according to Abi.

The selection will be made from three Indian firms, Tata, Clair and Holtec, and one Pakistani firm, Cementech.

Once the Habesha factory starts functioning, it will inject 1.2Mt into the economy, which will be equivalent to half of the current domestic production.

According to the cement factory, national demand is expected to soar to 13.8Mt in five years, while the local supply will rise to only eight million tonnes. Ethiopia had to export over two million tonnes of cement in 2008-09, with domestic production affected by acute power shortage.