Ethiopian investor plans US$1bn cement plant

Worku Ayetenew, a wealthy Ethiopian investor, wants to build a US$1bn cement plant. Mr Ayetenew is seeking a partner for the new cement factory, while he has already requested to lease 150ha of land for the construction of the plant, which is located around Dejene town, Amhara National Regional State, 230km away from the capital.

Six companies have already been shortlisted by the company to pick suppliers for the design, supply, construction, erection and commissioning of the plant. “We have already finalised preparations to complete the construction in the next two years,” said Kassim Siraj, project manager of the plant, which will be called WA Cement Factory. 

WA is the fourth cement factory that is expected to join the industry in the coming two years, after Abbay, Berenta and Lemi, the joint venture projects of National Cement.

The Ethiopian cement market has attracted the attention of global investors after the government opened the sector to foreign competition with an investment regulation approved two years ago. National Cement, for example, collaborated with a Chinese company to establish a US$2.5bn cement plant in Ensaro, Amhara.

Mr Ayetenew is the latest to join the lucrative cement market, with renowned tycoons, Buzuayehu T Bizenu, owner of National Cement, and Mr Al Amoudi, major shareholder of Derba Cement, staying in the business for over a decade. Another businessman, Getu Gelete, recently purchased a 40 percent stake in Habesha Cement from PPC Ltd. 

Currently, there are 13 cement companies that are operational, with an installed capacity of 15.4Mta. However, their actual capacity is only 6.3Mta, due to ageing machinery and lack of maintenance, among others. Officials expect that companies in the pipeline will narrow the current demand-supply gap, while existing factories will use at least 85 per cent of their installed capacity on average.

Read ICR's July 2022 issue article - Ethiopia: today and tomorrow