The Oromia Regional State has started negotiations with Ambo Gnmer Manufacturing, Mining & Agro Industry Share Company to construct a cement factory. The factory will likely cost around seven billion Birr, according to the Company’s board.
Last Monday, the shareholders of the factory, which was founded eight years ago, met and discussed the issues with high ranking regional government officials.
“Our aim is to rebuild the company,” said Addisu Arega, head of the Oromia Regional State Communication Affairs Bureau.
Almost a decade ago, the company received over 7,000ha of land to build a giant factory engaged in cement production, sugar, agro processing, livestock and mining.
Nevertheless, the plan to build the Company did not bear fruit as it was overambitious.
“The plan was set without considering our actual capacity,” said Zewde Zeleke, board chairman of Ambo Gnmer.
Now, with the help of the regional government, the industry will likely be functional soon, according to the Oromia Communication Bureau.
“The assistance of the regional government comes at the right time to advance the investment,” said Zewde.
For now, capital seems to be the major concern for the factory.
“Raising 30pc investment capital is fair enough for us to start the company,” said one of the board members of the company.
The factory will be constructed in Ambo, Oromia Regional State, 130Km away from Addis Abeba.
Ambo is known for its mineral resources such as sandstone, pumice and gold. Studies indicate that the city has a capacity of supplying, 90,000qt of cement a day annually. This is expected to give a new edge to manufacture and provide more cement to Ambo Gnmer.
“When the company becomes functional, we will have a comparative advantage over other cement factories,” Zewde added. “Unlike all cement factories, we can get the raw material from a place located close to the factory.”
With the aim of boosting capital, the regional government has already started to arrange a public private partnership.
“We are trying to convince investors and public owned enterprises to buy shares in the newly established company,” said Addisu, the communication head.
Dangote and Derba Cement Factories are major players in the cement market in Ethiopia, where the number of cement factories has reached 20. Currently, the country’s annual production capacity has reached over 15 million tonnes, while neighbouring Kenya stands at 6.3 million tonnes.
This year, it is not only Ambo Gnmer that was established with the help of the regional government. A few weeks ago, Kegna Beverages and Oda Transport share companies were formed.
The establishment of the new share companies comes six months after the peak of the unrest in Oromia, where hundreds of millions of Birr worth of investments were ransacked, vandalized and burned.
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