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Part 1: First large-scale biomass preparation and firing at Messebo Cement: Getachew Okbay, Messebo Cement Factory PLC (Ethiopia)

Part 1 of a 2 part presentation co-authored with Michael Suppaner, ATEC. Filmed at Cemtech MEA 2015, 8-11 February, Grand Hyatt Dubai, UAE

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Good morning every body. I will give you a brief introduction in Cement industry in Ethiopia first then the drivers for the biomass, then Mr. Michael will continue on the pile processing on the details of the technology. Ethiopia is located in East Africa with 90 million population and it has become one of the fastest growing economy in Africa.

It's a country recovering double digit growth for the last 10 years. So the macro involvement of the country is very conducive and attractive, so many local companies and international companies are investing in Ethiopia. The construction sector in Ethiopia has also shown a remarkable growth due to the sustainable economy growth.

Construction boom in the country has attracted investors to invest in cement plant construction. Due to this investment, many new plants have joined the cement market and the Ethiopian market is now changing into a new scenario. Just few years back, like 10 years back there were only two cement companies in Ethiopia.

One was Messebo with 2000 tons of clinker per day and the other one is a government plant with 3000 tons per day of clinker. So that time was like hot cake where the cement plants can sell with high price about 250 USD per ton and it was really the sellers market, now the scenario is completely changing.

The cement production in Ethiopia when you look at it, there are about 18 plants now at the moment, start operation and their capacity is 11 million tons per year it about 700% than it was before 7-8 years back. The production by the end of June this year will reach to certain millions because Dangote and PVC from South Africa will join the market too.

As per the government plan, the local cement production capacity is expected to reach to 27 million tons by the end of 2020. Where now the Government is now launching the GDP 2 program for the coming five years. This is the trend as already briefed you. The demand side, when we look to demand side consumption in the country is increasing and will continue to increase along with the economy growth.

So let's quickly see what are the drivers for the cement in Ethiopia. One is the power sector, the power sector is one of the key drivers for the cement demand in the country. Due to the development of industries and huge urbanization programs, the power demand in the country is increasing from time to time. At present, just few years back there were only a potential for two thousand megawatts in the country.

In 2015, it will reach to ten thousand megawatts and in 2020 it will raise to twenty thousand megawatts. Currently our government is building one of the huge power generation scheme with six thousand megawatts in Nile Basin that is about four billion projects and Messebo has signed a contract to supply this special cement with low heat hydration, high sulphate resistant cement.

Apart from the hydro power projects, the government is also allocating significant budgets in wind, solar and turmoil power generation plants. So you can imagine the consumption or the demand starting from the generation units to the transmission foundations and sub stations too. So the power sector will still continue to be the most driver for the cement industries.

The second big demand is from the road sector. From the road sector, at this point there's about 90, 000 kilometers which is as far concrete process in the country and the government has planned to increase by diving to 180,000 kilometers in the next five years. There's also big railway projects about 5, 000 kilometer network of railway which is connected to big four cities to the port of Djibouti. You know Ethiopia is a land locked country, we're using the port from Djibouti and from Somalia land.

So the road sector still will continue to be the big demand for the cement industry. The other project is housing projects, the housing development projects, we will also be one of the key drivers for cement demand in Ethiopia. The government, the major cities and especially the capital city Addis Ababa are undertaking massive construction works, fulfills the housing demand by citizens.

This housing development program will continue for the next 5-10 years. In the coming five years, the government has planned to build one million houses in the capital city, only in Addis Ababa. So this will continue to be huge demand for the cement industries, for the social sector also, the government has a plan to build 11 new universities with a capacity of 30, 000 students.

So the dormitory and the universities, the laboratories will demand big huge cement for the sector. The water development also key projects, build big reservoirs in the capital cities and other major cities in the country. For the industry sector, there are new 10, 11 new sugar projects and 10 new fertilizer projects, huge projects.

So still this area will be also a big demand for cement industries, private sector, private local and foreign investors will go for agriculture, manufacturing, real estate, buildings, hotels, healths etc. So the private investment will be one of the key drivers for cements demand. So, the potential demand at present is estimated to be about 7.5 million tons.

The demand is also expected to increase by 20-25% every year. The per capita cement consumption which should now below 100 kg is expected to increase to over 300 kg by 2020. So let's see the new entrants to the market. The government has licenced over 36 companies to construct new cement plants. Among the companies who took the license, 15 plants have already commissioned and completed their projects will start production, the remaining projects are also expected to be completed before February 2016.

The new entrants who have commenced production in the project on pipe line when completed are expected to fulfill the national demand. In view of this development, the government has temporarily stopped to issue any investment licence for cement plant construction, and also ban cement import to the country.

Cement export, Messebo, our plant cement, was only cement plant is the country to export cement on the neighboring countries in the period 2003-2005 long time ago. At that time, there was not enough demand. So we tried to export to Sudan, South Sudan and challenge was it is very difficult, the logistics because of transportation costs in Ethiopia is very big.

So, we found out that it is not visible at that time to do the export business. As the demand in the local market had increased, the export was then stopped from 2006 on wards and it was until coming to look for exports until recently. Now, the country is experiencing excess supply of cement and some cement plants are looking for export, especially those who are located near the port of Juhuti where national cement company they are starting exporting to Juhuti and Somalia land. They are located in 200 kilometers far from the port.

Cement price as I just noted before, we used to sell cement 250 USD per ton but this price has gone down to below 90 USD per ton this time. So the competition is very high, there is a price war at the moment so we have to be the best to sell the cement. So that was the main driver for our project for the the biomass, as you know the major cost for the cement production is energy. So to save, to minimize cost of production, one alternative use is using alternative fuels.

So we plant to use biomass with sesame husk as energy source. Most cement plants are using coal as energy and coal is imported from South Africa at a very high cost. Well, Messebo cement has it's own acquire for coal but it is calorificvvalue is not good enough, so we got it3, 000 kilo calorie per kg so we blend with the South African imported coal to minimize our first tool.

So generally when you see the outlook, the government of Ethiopia has formulated appropriate strategies to eradicate poverty and to bring the country to one of the middle income country by 2025, this is a vision of the government. The government has a determination and commitment to make this vision true. The result achieved so far have proved and are clear indication that the country is on the right track and will definitely become one of the middle income countries.

The country will contribute to register fast and sustainable economic growth. Along with the economic growth, the construction sector will also continue to grow creating big demand for cement. Thus the outlook for the economy in general and the construction sector in particular is very bright. Brief Messebo Cement factory, we have two plants, one with 2000 and one with 3000. 2000 is commissioned by FLS from Europe and 3000 ton is from China Asia [xx]. Currently we are producing four products, OPC, PPC, PLC and LHHS. Packaging we use 50 kg package, jumbo bag of up to 2000 kg with bilk loading. We have also owned PP bag plant with capacity of 60 million bags per year. So Messebo is planning on evolving in social and environment activities. The main motivation for going green is environmental case, public image, ethical values, business case and social pressure. Because of this we have planned to replace 40% of imported coal where we are using for the calciner to replace by using a system husk produce clean energy. To reduce the amount of imported fossil fuel used for cement production, to achieve greenhouse green gas emission reduction through partial substitution of fossil fuels.

So, this is the process flow generally. You know Ethiopia is based it's economy in agriculture and one of its crops is sesame and near our plant, about 400 kilometers, there is a big farm for sesame and the farmers they harvest the sesame once a year. Then the collection is, unlike other agricultural by-products collection wouldn't be a major problem because it is pre-collected up on harvesting, the stalk are cut and stucked in piles by the farmers. Plant have, we have now a plan to mobilize micro and small enterprises to collect these husks and deliver in our plant at Humera kafta for the bailing process.

The calorific value for this sesame husk is 4, 050 kilo calories per kg, this is a bailing plant operation. Then it goes to shredding, milling and weighing and combustion at a calciner. So the last product which is shredded and mill with hammer up to 50 mm size. So some of the advantage of using sesame husk as a fuel is cheaper source of energy and to reduce green house gas emission, reduce production cost by $4 per ton by using this sesame husk.

Create job opportunities to the local communities, obtain stakeholders acceptance and financial benefits summarized as USD 4 per ton of clinker is the advantage we can meet, and the investment cost is about 7.6 million and the return will be 24 months, return on investments. So it has also social benefits. Then the estimated income from carbon credits about $1.5 million USD. So it is a win-win-win solution. So the technical aspects on the pyroprocessing will be presented by my colleague Mr. Michael. Thank you very much for your attention.

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