Ethiopia: government drafts development strategy

Ethiopia’s Ministry of Industry is drafting a national cement industry development strategy that will enable it to overcome challenges and assist fast growth of the industry.

State minister of Industry, Mebrahtu Meles (PhD), told The Reporter that his ministry in collaboration with the Adama Science and Technology University started drafting the national cement industry development strategy last July.

Mebrahtu said the cement industry is facing several challenges including high production cost, limited market, inadequate transport service and unavailability of locally produced packaging materials. Most of the cement factories use coal as fuel. Though coal deposits are found in different parts of the country it has not been utilised. Cement factories import coal from South Africa and other countries. Mebratu said the coal import escalates the cost of production. Recurrent power cuts is proving to be another obstacle to the cement industry. The strategy is expected to be finalized and endorsed in the coming few months.

At the 7th annual Africa Cement Trade Summit held 6-7 April at the Sheraton Addis, Mebrhatu said that there are 18 companies engaged in cement production. The installed production capacity has reached 11.2Mta. This is expected to further increase to 17.15Mta. However, output is said to be around 5.47Mta.

Mebrhatu said the average cement production capacity utilisation rate in the country is below 50 per cent. "This level of capacity utilisation is substantially low compared to global average of 60-70 per cent or recommended acceptable optimum production capacity utilisation rate that range between 80-85 per cent."

Guest of honor at the Africa Cement Trade Summit, Mekuria Haile, minister of Urban Development, Housing and Construction, said that the mega public projects including the construction of sugar factories, railway lines, and hydro power plants created a high demand for cement consumption. "In order to respond to the growing demand of cement, our government has taken major actions in creating conducive environment for cement production by both local and foreign investors. Recently, different national and international business groups have shown interest in investing in Ethiopia-this may witness cement self sufficiency and export possibility too," Mekuria said. Ethiopia is exporting cement to Somalia, Djibouti and South Sudan in small amount. Mekuria also stressed the need to work on production cost reduction and market stimulation.

The Africa Cement Trade Summit is organized by a Singaporean company, Center for Management Technology in collaboration with the Ethiopian Ministry of Industry. More than 150 participants attended the summit and were also given the opportunity to visit Dangote Cement's new cement plant. The 2.5Mta works situated near Mugher will soon be inaugurated in the presence of senior Ethiopian government officials and Aliko Dangote, owner of the Dangote Group. (Source: AllAfrica News).