Derba Midroc announces second-round of price cuts, Ethiopia

Newcomer to the Ethiopian cement sector Derba Midroc will announce another round of price cuts on wholesale cement, intensifying the price war on the local market.

The 7500tpd Derba Midroc cement works was inaugurated in February this year, and is one of seven cement projects scheduled to come on-stream in the January-May period of 2012, according to Ministry of Industry data.

Derba Midroc’s managers claim that they cutting prices to spur demand in a market that is currently facing a downturn. Derba will introduce a cut of around 10 per cent cutting ex-factory prices down to ETB153/quintal.

The company has previously reduced prices from ETB500 down to ETB170/quintal and also offered a 60-day credit for buyers who advance 50 per cent of their purchase up front and against contractual collateral, the daily reports. Derba also delivers products door-to-door within a 600km radius of the capital, deploying close to 1000 recently-purchased Volvo trucks.

With new capacity coming on-stream in the Ethiopian market coinciding with a slowdown in the construction sector, local producers are looking for ways to boost sales. Larger manufacturers such as Mugher and Messebo Cement are seeking to export products with some smaller factories now reportedly following suit.