Chinese firm builds USD 50 mln ceramics factory
A Chinese investment firm, Arerti Ceramic Manufacturing PLC, has built a ceramic manufacturing plant with an outlay of USD 50 million.
The ceramic manufacturing plant is built in the Amhara Regional State, North Shoa Zone, Minjar Shenkora Wereda in Arerti town, 130km south east of Addis Ababa. Arerti Ceramic Manufacturing PLC was established by CCCC Industrial Investment Holding Company in August 2017. CCCC Industrial Investment Holding Company is the sister company of CCCC, the Chinese construction firm that built the Addis Ababa-Adama expressway and the Addis Ababa Bole International Airport Passenger Terminal Expansion project. CCCC began its operation in Ethiopia in 1998 with the Addis Ababa Ring Road project.
CCCC established the Industrial Investment Holding Company which is developing the Arerti Industrial Park on 100 hectares plot of land at an investment cost of 150 million dollars, 53km away from Modjo town. The Arerti Ceramic factory is the first enterprise to be built in the CCCC Arerti Industrial Park which is expected to accommodate 12 enterprises which will be engaged in the production of construction inputs and garment.
Chen Yushan, general manager of the CCCC Industrial Investment Holding Company and board chairman of the Arerti Ceramic Manufacturing, told The Reporter that the ceramic manufacturing plant is built on 15 hectares plot at an investment cost of USD 50 million. Construction began in September 2017 and completed in April 2019. “The total area is 30 hectares. We developed the first phase on 15 hectares. The second phase will lie on nine hectares and the third on six hectares,” Yushan said.
The ceramic manufacturing plant began test production two months ago. Yushan said the first plant mainly produces glazed tiles, the second plant will produce polished tiles and the third plant will produce sanitary pottery and accessories. The factory is now producing glazed floor tiles with Golden Lion brand and supplying its products to the local market through 12 agents – Ethio Ceramics is the main distributer.
“We got a good feedback from customers in terms of quality and price,” Yushan said. The ceramic manufacturing plant has the capacity to produce 20,000 sq.m. of tiles daily and six million sq.m. per annum. Yushan, who claims that the Arerti Ceramic factory is the biggest ceramic factory in Ethiopia, is envisioned with substituting the imported ceramic products. “We want to replace the imported ceramic from China with our products and help the government save foreign currency. We also plan to export ceramic products to other African countries,” he said.
The Arerti Ceramic Manufacturing has created employment opportunities for 500 local people – 450 permanent and 50 temporary. Executives of the company said the factory created employment opportunities for the local community and offers free meal to the factory workers.
Ethiopian Investment Commission deputy commissioner (Industrial Parks) Hanna Arayasellassie visited the Arerti Industrial Park on Tuesday. Hanna commended the CCCC Industrial Holding Company and Arerti Ceramic Manufacturing. Hanna told The Reporter that the company has demonstrated a remarkable performance. “The Arerti Industrial Park is one of the private industrial parks we have in Ethiopia. They have completed the construction of the Ceramic Manufacturing plant in a short period of time and started production even if they have not yet got electric power supply,” Hanna said.
Hanna said the factory is utilizing local raw materials. “They source 80 percent of the raw materials locally and this increases the value we capture locally.”
The Arerti Ceramic Manufacturing plant mainly use an industrial mineral called fieldspar to produce ceramic products. Local youth cooperatives mine and supply the raw materials from the mountains found near the factory.
According to Hanna, Arerti Ceramic Manufacturing Plc is working on import substitution. “The company will play a great role by substituting the imported ceramics. They are also trying to attract other manufacturing firms to the industrial park,” she said. “Since the government wants private companies to develop industrial parks it will provide the required assistance to the CCCC Industrial Investment Holding Company and Arerti Ceramic Manufacturing,” she added.
The road has not been beds of roses for Arerti Ceramic Manufacturing. Electric power supply is one of the main obstacles that the company has faced. Yushan said the Ethiopian Electric Power has not been able to provide electric power supply to the industrial park. “We invested additional two million dollars to purchase six big generators, transport and install at the factory to start production. Two years ago we were promised that we will get power supply from the national grid but until now we do not have power supply. So we are forced to use six big and four small generators to run the factory. We are spending a lot of money to buy diesel for the generators. As a result our production cost has increased by 15 percent,” he said.
Yushan said his company held discussions with the Ethiopian Electric Power, the Ethiopian Investment Commission and the Amhara Regional State. “They are now trying to solve the problem,” he said. “CCCC is a state owned company. We have responsibility but if it was a private company it would not have been operating the factory without electric power supply from the national grid,” he added.
Shortage of skilled labor and labor disputes are the other challenges the company is facing. “As Arerti is a remote town there is shortage of skilled labor. Due to the cultural difference we some times face labor dispute. We are training the employees and resolve issues,” Yushan said.
Hanna told The Reporter that EIC is holding discussions with EEP to find ways that the company can get power supply from the national grid.