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BusinessPlant to shortly join the construction market

Plant to shortly join the construction market

After some delay, Habesha Cement Factory is finally set to join the booming cement market within the coming three weeks to take a slice of the market already controlled by the likes of Dangote, Messobe, Derba, National and Mugar Cement Factories. 

Laid on 33 hectares of land around Holeta, some 35 km north west of Addis Ababa, the plant was built with an investment outlay of 3.4 billion birr.

Factory CEO Mesfin Abi (Eng.) told The Reporter on Friday that the plant would have a capacity to produce 1.4 million tons of cement annually, and further noted that despite the presence of other big factories engaged in cement production, there is enough market in the country.

The factory is sharing raw materials, particularly pumice, with other factories like Derba MIDROC, Muger and Dangote.

Two years ago, the Ministry of Industry revealed that it was working on a 10-year National Cement Industry Development Strategy for the period extending to 2025. The strategy was designed to address local industry issues such as unavailability of locally produced packaging materials, poor transport links, high cost of production and a limited market. Key targets include stimulating cement demand to reach 12.22 million metric tons per year by 2020 by moving to concrete road construction and raising capacity utilization rate to 75 percent by 2017 and to 80 percent by 2025.

Habesha also has an international angle in that South Africa-based Pretoria Portland Cement (PPC) and Industrial Development Corporation (IDC) have teamed up to purchase a major stake in Habesha Cement in the autumn of 2014, a time of financial stress for the company.

PPC has acquired Industrial Development Corporation’s 20 percent stake in Habesha Cement for a purchase consideration of USD 13 million. PPC’s initial 27 percent stake in Habesha, acquired in July 2012, now rises to 51 percent while the remainder stake in Habesha is held by some 16,000 local share-holders.

The former Ministry of Mines granted a mining license to Habesha Cement for the excavation of inputs for the company’s cement production.

The contract allows Habesha to quarry limestone, gypsum, clay and sandstone from 1.12 sq. km of land in the West Shoa Zone of Oromia Region. The quarry operations will be undertaken with a capital of USD 1.38 million.

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