The 1.4 billion Birr cement expansion project launched by Muger Cement Enterprise with an objective of minimizing the growing shortage of cement in Ethiopia would begin production by in March 2009, Enterprise Acting General Manager said.
In an interview with ENA on Monday, the Acting General Manager, Mekonnen Zergaw said the construction of the project would enable the Enterprise to increase its existing production capacity of 870,000 tons to 1.4 million tons annually, a 150 per cent increment.
He said 17 per cent of the construction of the project, which was launched in February 2007, has already been completed.
Though the project is expected to minimize cement shortage to some degree, it is not likely to fill the gaps of supply and growing demand, he said.
According to Mekonnen, the Enterprise, whose share in the country’s total cement supply, meets only 5 per cent of the demand which stands at 17.8 million tons according to 1999 EC survey.
He however said the stated volume does not represent the country’s total cement demand as it refers to the volume of cement demand by users to purchase from the Enterprise in 1999 EC.
Mekonnen said the country’s total cement production is estimated at 1.9 million tons while the demand for cement to Muger Enterprise alone stands at 17.8 million tons annually according to the survey.
The growing rate of construction, investment and the change in the culture of the people to building of houses with mud to cement blocks, among others, were the main factors for the increase in demand of cement, he said.
However, the government has been striving to alleviate the growing shortage of cement in the country. The expansion project and the import of cement from abroad through Francovaluta are some of the efforts launched by the government as part of mitigating the shortage and price stabilization, Mekonnen indicated.
He said close to 900,000 tons of cement was imported from November 2006 to December 2007. The volume of cement imported over the last six months stands at over 575,000 tons.
According to him, the government has also been encouraging private investors to engage in the sector by providing various incentives. A number of cement factories are presently under construction, he added.
When the projects are completed, it will likely to reduce the shortage and price of cement in the country.
The price of cement per quintal, which was less than 80 Birr some four years ago, has increased to 160-165 Birr on average.
However, the Enterprise is selling a quintal of cement for 135 Birr and 125 Birr in Addis Ababa and Muger respectively in the face of the dramatic increase of cost of production due to the skyrocketing price of fuel in the global market, Mekonnen told ENA.
Source: Ethiopian News Agency