Concrete Competition for Cement Market Still Unmet

With the ongoing construction boom in the country, various high rise corporate headquarters, dissatisfaction over building heights and the complex process of obtaining construction permits were reported but none of this matters if there was no cement, the demand for which remains high.  The 2015 demand estimated at 7.47 million tonnes is projected to increase to 8.88m tones and 10.56m tones in 2016 and 2017 respectively.  Whether the existing 21 cement factories in Ethiopia, with 2 more in the pipeline this year, could reach the demand or not is yet to be determined.

The month of May 2015 brought the giant Dangote Cement Plc to the sector. The demand end of the sector’s chain welcomed it with high hopes, while the supply side expressed anxiety about its entry to the market. The subsidiary company of Dangote Group joined the sector at an investment cost of 600 million dollars. This however came late, seven years after receiving a licence and securing 134ha of land at Mugher in Adebern Wereda in Oromia.

Though it had already witnessed competitive tendencies, the sector could not meet the demand fully.  Derba MIDROC started the door to door delivery service dispatching its 1,000 Volvo trucks. Dangote followed suit and ordered 6,000 heavy trucks out of which 23 have already been delivered and dispatched to duty.

The price ranges also are indicative of the tight competition between the leading factories.

PPC (Portland Pozzolana cement) from Derba, Mugher and Messebo sells in Addis Abeba for 184 Br, 225Br, and 295 Br. respectively .

All however share the same constraint, limited power supply.

Published on Sep 14,2015 [ Vol 16 ,No 802]



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