Displaying items by tag: Abay Industrial Development

Derba MIDROC Cement signed a contract with Sinoma International Engineering in recent weeks to build a US$282m upgrade at its integrated Derba cement plant in Oromia. The move is the latest in a steady stream of projects that have been announced in Ethiopia over the last few years. Other recent developments include a deal in July 2022 by businessman Getu Gelete to buy PPC’s stake in Habesha Cement and plans in August 2022 by investor Worku Ayetenew to build a US$1bn cement plant with a production capacity of 12,000t/day. Alongside these capital intensive projects, the government has been trying to regulate the price of cement through measures such as setting fixed prices, limiting the volumes that individuals can buy and asking producers to cut distributors out of the supply chain.

To summarise some of the plant projects over the last couple of years, the Derba MIDROC Cement upgrade project intends to double the production capacity of the integrated Derba cement plant in Oromia to 15,000t/day. The other big ongoing project was announced in early 2021 when East African Holding and China-based West China Cement agreed to build a 10,000t/day plant at Lemi in Amhara Region. East African Holding is the parent company of National Cement, one of the larger producers in the country. Then in July 2021 Sinoma International Engineering’s subsidiary Suzhou Sinoma signed an initial deal with Western International Holdings, West China Cement’s international arm, to build the plant. Prime Minister Abiy Ahmed visited the construction site in March 2022 to lay the foundation stone but no commissioning date has been disclosed so far. Based on Sinoma’s assessment when it signed the contract, construction would take around 20 months, so a commissioning date by late 2023 seems reasonable. There are also a number of other projects that have been announced in the local press such as Abay Industrial Development Share Company plant at Dejen. FLSmdith said that the contract to build the 5000t/yr plant became effective in late 2020. However, not much more has been released publicly. Another project at Berenta in Amhara is also reportedly under construction.

The Global Cement Directory 2022 places the country’s production capacity at around 12Mt/yr. This compares to 15Mt/yr from 13 companies as reported by a local news source although this figure is likely to also include grinding plants. Yet the same source also placed the actual working capacity at 6Mt/yr due to old machinery and poor maintenance. As for the market in Ethiopia, Dangote Cement said that the sales from its Mugher plant rose by 1.8% year-on-year to 1.7Mt in the first nine months of 2022 and that the unit was running at full capacity in the third quarter. It reckoned that it held a 42% market share during this period, out of a total market of around 4.2Mt. Previously it said that the total market for the whole year was 7Mt in 2021.

Unfortunately it also mentioned issues with security in the region. This became a live issue this week with news that at least 30 employees of Dangote Cement were reportedly kidnapped in early December 2022 by an armed group that calls itself the Oromo Liberation Army. This is particularly sad for the company given that its country manager was shot dead in 2018. Two employees of the Mugher Cement plant were also taken hostage by the same group in October 2022 although thankfully they were later freed.

A number of projects have been announced in Ethiopia over the last few years but they appear to be taking a while to materialise. This time though a couple of the projects do seem to be on the way and the change in ownership of Habesha Cement seems to suggest a renewed vigour to the local construction market since the government opened up investment. Unfortunately, security concerns are pressing as demonstrated by what happened to some of Dangote Cement’s staff this week.

Ethiopia: Prime Minister Abiy Ahmed says that a new 7000t/day cement plant is almost ready for commissioning. New Business Ethiopia News has reported that the government hopes that the unnamed unit will be operational by June 2021. The 2.5Mt/yr Abay Cement plant at Dejen in Amhara region was previously scheduled for opening in 2021. The news comes at a time of rapid cement price rises in the country. A large black market has also arisen to serve overextended demand.

Ethiopia: Denmark-based FLSmidth says that its contract with Abay Industrial Development Share Company for engineering, procurement and supervision on the upcoming Dejen cement plant is now effective. The 5000t/day plant will cost US$120m and create new 300 jobs, according to the supplier. It said that the plant will “play an important role for the development of local infrastructure.”

The supplier is responsible for design and engineering, full equipment supply, automation systems, installation and commissioning, as well as training and extended supervision. Key deliveries are due to begin in late 2021.

FLSmidth president Carsten Riisberg Lund said, “We are happy to see the contract now in effect. Following months of challenging working conditions on sites around the world, we are eager to get started on the project. This contract once again underlines our position as the preferred supplier of sustainable and productivity-enhancing solutions to the global cement industry."

Ethiopia: Abay Industrial Development has ordered a new 5000t/day cement plant worth Euro100m from Denmark’s FLSmidth. The plant will be built near Dejen. FLSmidth has received a down payment for the project but it will not be added to its order intake until further conditions have been met.

The order includes design and engineering, full equipment supply, automation systems, installation and commissioning as well as training and extended supervision. Completion of the order is expected during the second quarter of 2022.