Cement at lower cost


The Ministry of Trade and Industry has authorized the Ethiopian Industrial Input Developmental Enterprise for the first time to distribute cement through its 87 centers over the country to stabilize the market.
As stated by the Ministry the enterprise will purchase cement from the local cement manufactures up to 20 percent of their production and distribute it with a fair price. As Eshete Asfaw, Sate Minister of Trade and Industry said that one of the mandates of the enterprise is to ensure supply of industrial inputs whenever necessary for trade and industry, the profit rate of the enterprise is much lower than the retail market “the lower rate of the profit would have better crack on solving the challenges facing the construction sector.”
The Ethiopian Industrial Inputs Development established as a Public Enterprise in 2014 under the Ministry of Industry. The enterprise mainly establishes, administers and transfers, whenever necessary, enterprises which ensure supply of industrial input, to supply industrial inputs by manufacturing domestically and abroad, to export industrial inputs which are in excess of the domestic industry consumption, to work jointly with enterprises which are engaged in producing and supplying industrial inputs and raw materials, work in collaboration with local and international governmental and nongovernmental institutions having similar objectives, sell and pledge bonds and to negotiate and sign loan agreements with local and international financial sources.
When cement producers are tackling a long list of challenges, unfavorable supply-demand balance, higher cement prices, escalating production costs, low utilization rates, social unrest, and a lack of foreign currency; The price of cement has been on a rollercoaster ride. The government showed strong determination to create a conducive business environment, to raise efficiency and competitiveness of the industry. The ministry has been making manufactures set constant prices and pursue their distributers.
According to the ministry, in the retail market cement is sold around 350 birr per quintal, however they buy it from 214 to 228 birr per quintal from the manufactures. The enterprise will sell it with a margin of profit about 1.5 to 2 percent per quintal.
Ethiopian cement capacity grew at an annual average rate of 6.8 percent between 2013 and 2018, according to date from Cement World 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. Cement known as the back bone of the construction world typically a heavy-consuming cement market, Ethiopian cement production had proven insufficient to meet demand.
CW Group expects Ethiopia’s cement consumption to grow through 2023, driven by a strong economy which is expected to be the fastest-growing in Sub-Saharan Africa.