Faced with a chronic cement shortage that risks derailing condominium construction, an expert committee of the Addis Ababa City Administration is seriously considering re-opening the Addis Ababa Cement Factory, 10 years after it was closed for environmental reasons.

The expert committee was formed by the City Administration Housing Agency and Mugar Cement Factory to assess options in tackling the current shortage. The Administration is the largest consumer of cement and plans to construct 150,000 houses this year. It is feared that the city alone could consume all of Mugar output.

Mugar is the biggest player out of the three cement factories active in the country, with an annual production capacity of 900,000t. Mesebo’s 700,000t annual production, added to Dire Dawa’s 72,000t, brings the nation’s total capacity to 1.6Mt; far short of the yearly demand of about 2.4Mt.

So far, the committee has come up with three potential options to address the cement shortage: importing finished cement, importing clinker, or to reactivate the Addis Ababa Cement Factory.

The Factory used to produce cement before an environment issue forced it to stop manufacturing clinker. Since then, the factory has limited itself to grinding clinker produced in the more environmentally friendly Mugar plant.

According to sources, the committee, in coordination with members from the Ministry of Works and Urban Development, is already leaning towards importing clinker and, when feasible, reopening the Addis Ababa Cement Factory to the full production of cement

The need for cheaper cement options is urgent, it appears. A recent tender floated by the Administration for the supply of the City Housing Agency’s condominium project was cancelled when offers were too expensive.

A Chinese company, CGC Overseas, has suggested importing clinker, particularly from Iran, and process it at the Addis Ababa plant. If the study is accepted, the crusher at Mugar has the capacity of producing 120,000t of clinker yearly.

CGC Overseas, established in 2004, owns a crusher plant in the Bole Lemi area that exclusively supplies aggregate to the City Housing Development project office. It invested 1.5 million dollars to establish the plant and imported construction materials worth four million dollars. The company signed its first construction project the same year with the Ministry of Water Resources for the construction of the Harar potable water project worth 49 million Birr.

Tefera Abebe, general manager of Mugar Cement Factory, believes if importing clinker is profitable, it is easy to crush from the Addis Ababa plant and deliver it to the market. The 25tph grinding capacity at Addis Ababa could be ready for additional clinker, said managers from Mugar Cement Factory.

But to turn the old Addis Ababa factory into full-fledged cement producer is another story. A huge investment would be needed to convert the plant, and thereby ignoring the immediate problem at hand, said a management source from Mugar.