Ethiopia-based producer Inchini Bedrock Cement factory is seeking approval to export cement volumes to neighbouring countries as domestic demand has declined, forcing the factory to operate at 52 per cent capacity utilisation.

The Addis Fortune reported that the company is seeking an export permit and is in negotiations with three regional customers, citing Inchini’s operations manager, Daniel Ganyi.

According to the report, the management at the local cement factory have concerns on the company’s ability to be competitive on the regional market but remain optimistic that their export strategy will enable them to succeed.

Domestic demand has been low since June 2011 and increases in production capacity and driven prices down from around ETB500 (US$27.8) to less than ETB300 currently. Surplus supplies are  expected to continue in the current fiscal, with demand estimated to be 5Mt and production at 8Mt. The surplus will also be exacerbated by the entry of five new plants coming on-stream and government imports of 27,000t under prior contractual obligations.