Displaying items by tag: Ethiopia

Ethiopia: Regional officials are demanding that foreign cement producers, including Dangote Cement and Derba Midroc Cement (DMC), should let cooperatives of unemployed young adults run part of their mining businesses. A draft contract drawn up by Oromia state’s East Shewa Zone administration wants the young adults to operate pumice mines for the cement producers, according to Bloomberg. The initiative follows attempts by the national government to alleviate social pressures, following violent protests in the state in late 2016 in response to over alleged land dispossession, political marginalisation and state repression. The local administration reportedly stopped production at the Dangote and DMC plants in early March 2017 while it discussed its proposals with the producers, according to local press.

Ethiopia: Representatives of the Ethiopian and Chinese cement industries have signed a memorandum of understanding at the 2017 Ethio-China Cement Forum. Industry Minister Alemu Sime said that the forum was ‘vital’ to bring Chinese skills and experience into the local industry, according to the Ethiopian Herald newspaper. Representatives from the Chinese Cement Association, the Ethiopian Cement Association and local producers were in attendance.

Ethiopia: Dangote Cement is building a bagging plant and a third silo at its Mugher cement plant. The US$19m bagging plant will have a capacity of 120 million bags/yr, according to the Ethiopian Reporter newspaper. It is scheduled for completion by July 2017. The silo should be completed by the third quarter of the year.

Deep Kamara, the managing director of Dangote Industries Ethiopia, also said that the company is considering building a second production line in the country. However, procuring spare parts is proving difficult for the plant due to shortages of foreign currency and delays in shipping new parts. The company is expecting help from the government and it needs to spend up to US$15m on spare parts for the plant.

The Mugher cement plant opened in 2015 with a cement production capacity of 2.5Mt/yr. Equipment at the plant was set on fire in late 2016 in a series of riots in the region.

South Africa: PPC’s sales volumes have risen by 4% in South Africa and by 9% in Zimbabwe, Rwanda and Botswana collectively in the first nine months of 2016. The cement producer reported in a trading statement that its sales volumes in South Africa had risen overall but that its prices had fallen. It is planning price increases in selected regions in February 2017 in selected regions.

In Zimbabwe, the company saw a boost in cement sales following the commissioning of a mill in Msasa, Harare although it has faced liquidity challenges that made importing raw materials difficult. In Rwanda it has continued to ramp-up production and in Botswana sales have risen in the last quarter of 2016 due to sales promotions.

The cement producer also reported that the cement plant it is building in the Democratic Republic of the Congo was 95% complete in January 2017. Hot commissioning is due to start at the site in February 2017 and operational cement production anticipated to start in the second quarter of 2017. Operational cement production is also expected to start in the second quarter of 2017 at its project in Ethiopia. Finally, the company’s Slurry SK9 new kiln line in South Africa was reported as being 54% complete. Commissioning and ramp-up for the site is scheduled for the first half of 2018.

South Africa: PPC has reported update on projects in the Democratic Republic of Congo (DRC) and Ethiopia. In the DRC it said that engineering, procurement, and construction (EPC) contract work from Sinoma is complete and overall the cement plant it is building is 90% complete. Power infrastructure is being built at present and hot commissioning at the site will start once this is in place. Sales of cement are scheduled to start in February 2017.

In Ethiopia the cement producer has planned to commission its 1.4Mt/yr Habesha plant in the second quarter of 2017. Plant construction is reported as ‘progressing well’ with overall project progress above 80%, civil construction 94% complete, mechanical erection at 66% and 95% of equipment manufactured and delivered to site. The project has a budget of US$180m.

Nigeria: Dangote Cement’s pre-tax profit has fallen by 10.9% year-on-year to US$466m in the first nine months of 2016 from US$523m in the same period in 2015. Its earnings before interest, taxation, depreciation and amortisation (EBTIDA) fell by 16.3% to US$559m from US$667m. However, sales revenue rose by 20.9% to US$1.38bn from US$1.14bn. It blamed the drop in profitability on falling prices in Nigeria, negative currency effects and on rising fuel and power costs.

“Nigeria has achieved record volume growth and our non-Nigerian operations are performing well across Africa. Our switch to coal in Nigeria will have an immediate impact on margins now that we have abandoned the use of low pour fuel oil (LPFO), improving fuel security and reducing the need for foreign currency. Furthermore, our new pricing will offset the impact on costs of the devalued Naira,” said the chief executive officer, Onne van der Weijde. He added his company’s strong performance in sales had been hit by poor economies in the countries it operates in and by heavy seasonal rains in West Africa.

The producer reported that its sales volumes of cement sold grew by 28.1% to 11.9Mt in Nigeria and by 72.9% to 6.5Mt elsewhere in Africa. Sales outside of Nigeria were bolstered by production ramp-up in Ethiopia and Zambia, new operations in Tanzania and improved sales in Ghana. Plants in the Republic of Congo and Sierra Leone are due to become operational in mid-November 2016.

Ethiopia: Rioters have set fire to trucks and machinery at the Dangote cement plant at Ada Berga in Oromia, according to the Ethiopian state broadcaster Fana. The riots have followed the deaths of at least 55 people in a stampede at a local religious festival on 2 October 2016. Regional government offices were also set on fire and a police station was stormed during the fracas.

Ethiopia: The former governor of Nigeria's central bank, Sanusi Lamido Sanusi, has claimed that it was a cheap electricity deal that attracted Dangote to set up a cement plant in Ethiopia and that the cement market in East Africa will be impacted as the Adaberga wereda-based plant starts exporting cement costing almost 40% less than regional manufacturers, according to AFK Insider.

To attract Dangote to the East African country, the government offered to supply the company with electricity at a discounted rate of US$0.03/kWh, in exchange for the company building a plant in Ethiopia. This enabled Dangote Cement to cut the cost of producing a ton of cement by 60%, according to Sanusi in an opinion piece published by Premium Times. For a cement manufacturer, that is all the incentive that you need, Sanusi said, adding that this helped the construction industry in Ethiopia to boom.

The low-cost cement is now being exported to neighbouring countries like Kenya, where retail prices have remained static even as competition increased in the sector over the last decade. This is likely to shake up the regional cement market and make it affordable for developers to build more properties. Dangote Cement, one of the largest manufacturer of the product in Africa, said in a statement last week that it had started exporting to Kenya at US$74/t, more than 40% cheaper than what local manufacturer sell their brands for.

Dangote also started selling cement in Tanzania in 2016 after completing its factory in Mtwara about 400km from Dar es Salaam.

Ethiopia, one of the beneficiaries of the Power Africa program, an initiative of US President Barack Obama, has the highest electricity generating potential in East Africa due to its vast number of rivers and hilly terrain. It has invested billions of dollars to build several hydro-electric power plants including what will be Africa's largest dam, the Grand Ethiopia Renaissance Dam.

Original story from AFK Insider, http://afkinsider.com/132330/ethiopias-cheap-electricity-helps-dangote-shake-up-east-africas-cement-market/

Ethiopia: Derba Cement is planning to build a US$300m expansion to its cement plant. The new plant in Chancho City, Sululta will have a production capacity of 2.5Mt/yr. The project is expected to take 18 – 24 months to complete once started, according to the Cihan News Agency.

The subsidiary of MIDROC is in talks with China National Building Materials Company to build the new plant. It is negotiating with the Development Bank of Ethiopia, International Financial Corp, the World Bank Group investment arm, the African Development Bank and the European Investment Bank to finance the project, according to Derba Cement CEO, Haile Assegide.

Haile added that Derba Cement’s decision to build an upgrade in a market with excess production capacity made sense due to the project’s cost efficiency. The new plant will use existing infrastructure to cut its costs. The plant will also benefit if the government implements the Second Growth and Transformation Plan (GTP II) increasing demand for cement.

Derba Cement has a 2.5Mt/yr cement plant at Chancho City. However, the plant is producing 0.5Mt/yr less than its capacity due to power supply interruptions. The Gilgel Gibe III Dam, that started producing electricity in late 2015, is expected to normalise the electric supply to the plant.

Ethiopia: Dangote Cement is to invest US$450m to double its current production capacity to 5Mt/yr at its Oromia Plant. The Nigerian cement producer has already received a 36ha plot of land from Oromia State, near the plant's site in Mugher, Adebern Wereda.

The company requested the land from Oromia Investment Commission in September 2015. Now it is processing right of way issues at Wereda level. The new plant will employ 1300 people when it is completed, according to All Africa. The company also intends to open a bag factory to supply packaging for Dangote and others.

Ethiopia is estimated to have a cement production capacity of 15.1Mt/yr yet actual production is only 10Mt/yr. Cement production capacity is expected to reach 27Mt/yr by the end of country's second Growth and Transformation Plan.