Ethiopia’s Mugher and Mesobo restart production

July 13th, 2009 | EthioPolitics.com |

Government to take measures against illegal cement distributors

By Addis Mulugeta, Capital

The Ministry of Work and Urban Development (MoWUD) on Friday confirmed that both Muger and Mesebo cement factories have partially restarted production to ease the current cement shortage.

According to Mekonnen Zergawu, Chief Executive Officer for Mugher Cement, the factory had not been producing and had instead been conducting maintenance work for the last two months. Subsequently, it could not resume production due to the power shortage.

The factory started production partially on Tuesday, July 9, after the Government decided to supply electric power. Mekonnen explained that by next week the factory will be distributing two kind of cement, namely Ordinary Portland Cement (OPC, High quality cement) and Portland Pozolana Cement (PPC) for its customers. The factory is selling OPC for 192 birr whereas PPC is 155 birr. Currently, in the black market a quintal of cement is selling for 400-450 birr.

Arkebe Equbay, State Minister at MoWUD explained that this is the right decision of the Government to attempt to reduce the current high price and ease the shortage of the building material in the country.

He confirmed that both Mugher and Mesebo are expected to produce one million quintals of cement by the end of this month. In addition, five ships have already unloaded one million quintals of cement at the Port of Djibouti and the remaining one million will come in the next two or three months.

The Government assigned the Ethiopian Merchandise Enterprise Wholesale imported Trade (MEWIT) to import and distribute the cement at 250 birr per quintal. Licensed government development agencies, contractors and the private sectors can get cement from MEWIT.

The Government believes that illegal distributors are exacerbating the shortage and increasing of the price of cement. Although the Government did not take any measure yet against those illegal distributors, in the forthcoming weeks it will start acting, Arkebe confirmed, adding that the measure will be very serious, even licence withdrawal, confiscation of the cement and firing those acting illegally in selected distribution centres.

So far, the Government has distributed five million quintals of imported cement for a total of 50 million dollars.

Arkebe announced that in the Ethiopian budget year 2009/10, the demand for cement will increase to 50 million quintals. To meet the demand, the Government plans to import 25 million quintals of cement and the other 25 million quintals of cement is expected to be produced by local cement factories.

Mugher Cement Enterprise is the largest factory in the country with a 900,000 quintals production capacity per annum.