Ethiopian cement capacity grew at an annual average rate of 6.8% between 2013 and 2018, according to date from CW Group. The growth in capacity came as a result of the government’s five-year Growth and Transformation Plan, as well as federal incentives to attract local and international cement producers.
Ethiopian cement capacity grew at an annual average rate of 6.8% between 2013 and 2018, according to date from CW Group. The growth in capacity came as a result of the government’s five-year Growth and Transformation Plan, as well as federal incentives to attract local and international cement producers.
“Typically a heavy-consuming cement market, Ethiopian cement production had proven insufficient to meet demand until 2014, thus making Ethiopia an importing market,” CW Group Business Analyst, João Sobrinho, told World Cement. “Through this expansionist agenda, the domestic cement industry is increasingly becoming a net exporter and improving its international competitiveness”
Recent entrants into the market have included Dangote Cement, Derba, Messebo, and National Cement, while Abay Industrial Development Share Co. recently signed a contract with FLSmidth for the construction of a greenfield cement close to the city of Dejen.
Valued at €100 million, the contract will see the Danish engineering company construct a 5000 tpd plant, including design and engineering, full equipment supply, automation systems, installation, and commissioning, as well as training and extended supervision. It is expected that the order will be completed in 2Q22.
“With an industry operating at a 50% capacity utilisation rate in 2018, potential new entrants may be motivated by the projected double-digit growth in cement consumption through 2023,” continued Sobrinho. “This expected trend is likely to be driven by Ethiopia being the fastest-growing economy in Sub-Saharan Africa, and also by the 2015 – 2025 Cement Industry Development Strategy.”
Although broadly positive, the outlook for the Ethiopian cement industry does face a number of challenges, including the shortage of skilled workers, lack of foreign currency, as well as erratic power supply, concluded Sobrinho. “In the medium term, the domestic industry will have to focus on solving these setbacks, if it wishes to become an international cement force to be reckoned with.”
(World Cement)