Investor appetite is growing in the Togoga Cement Factory, a new cement project in Tigray that is set to launch share sales in Addis Ababa. Located near the industrial park, 18 kilometers west of Mekelle, the factory aims to float 52,000 shares.
Share sales began three months ago at a starting price of 100,000 birr per share for founding shareholders. Due to high demand, the price for founding shareholders has since been raised to 200,000 birr per share. The minimum share price is set at 100,000 birr, while the maximum investment amount is 520 million birr.
In the past three months, the project has already sold shares worth 1.6 billion birr, indicating strong investor appetite for the venture. The Togoga Cement Factory requires a total investment of 17.4 billion birr and aims to produce 5,000 tons of cement per day.
The success of the project will be critical to Tigray’s economic development, as the region seeks to rebuild and recover from the devastating conflict. The project’s organizers are optimistic about its prospects and hope to attract more investors in the coming months.
According to geological surveys, the mountain chains of Togoga are rich in cement resources that can be mined for up to 250 years, say the promoters.
“If we can access foreign exchange, construction will begin within four months while share sales continue,” said Ashenafi Hailu, president of Tigray’s Chamber of Commerce and Association and a member of the organizing team for the Togoga Cement Factory, speaking to The Reporter.
In addition to the diaspora, the organizers are also considering bringing onboard foreign partners to address the foreign currency issue.
“Several foreign partners have expressed interest in investing in Togoga. While we have limited opportunities for investors to become major shareholders, we’re focusing on selling shares to the public. Some foreign partners are willing to provide technical assistance,” Ashenafi added.
The Togoga Cement Factory was initiated during the COVID-19 pandemic. However, the plan was delayed initially by the pandemic and then by the war.
“We hope our leading role will encourage other investors to resume activities in Tigray,” Ashenafi added.
The Togoga Cement Factory is a groundbreaking investment in Tigray, where businesses have been at a standstill since the outbreak of war two and a half years ago. Despite the Pretoria peace agreement signed seven months ago, businesses remain unable to resume activities due to financial constraints.
According to Ashenafi, industries and investment projects in Tigray are unable to restart operations due to their finances being tied up. “All the loans they took out before the war have been categorized as nonperforming loans (NPLs) by banks. They can’t get new loans until this is resolved,” he explained.
Although commercial banks have resumed operations in Tigray, they are unable to address the issue of NPLs, claims Ashenafi. “Without approval from the National Bank of Ethiopia (NBE), the banks can’t do anything. Through the Tigray Interim Administration, we have requested the central bank to resolve this issue. We are awaiting a response,” he added.
The damage to businesses and investments in Tigray can be categorized in three ways: some have been completely destroyed, others have been partially destroyed and looted, and some can resume operations once they obtain LC approval, power supply, spare parts, inputs, and employees.