Dec. 5 (Bloomberg) -- Derba MIDROC Cement Plc, Ethiopia’s biggest cement factory, said it will start production within the “next 10 days,” helping end a shortage of the building material in Africa’s fourth-largest economy.
The $351 million plant, about 70 kilometers (44 miles) northwest of the capital, Addis Ababa, will produce 8,000 metric tons of the building material daily by February, said Chief Executive Officer Haile Assegide. Derba is part of the MIDROC Ethiopia group owned by Mohammed al-Amoudi, an Ethiopian-born Saudi Arabian billionaire who is one of the biggest investors in the Horn of Africa nation.
Once output begins, Ethiopia “will be self-sufficient for the coming two to three years” in cement, Haile said in an interview at the site on Dec. 1.
Ethiopia, a net importer of cement, plans to boost output ten-fold by mid-2015 to 27 million tons, according to the government. The Derba plant will add 2.5 million tons per year, while expansions to Mesobo Building Materials Production Plc, owned by the country’s ruling party, and state-owned Mugher Cement Enterprise will add another 1 million, it said.
Dangote Cement Plc, Nigeria’s biggest company by market value, said in October it plans to invest $400 million in an Ethiopian factory with the capacity to produce 1.5 million tons per year.
Derba Cement, built by China National Building Material Co., may earn more than 2 billion birr ($115.9 million) annually, Project Manager Tadesse Kebede said in an interview at the site. “If everything goes well it will be a cash cow,” he said.
Al-Amoudi’s company invested $100 million in the operation, with the European Investment Bank, the African Development Bank, the International Finance Corp. and the Development Bank of Ethiopia providing the rest of the funds.
The project was delayed for “almost one year” because obtaining the loans took longer than expected, Tadesse said. “To work with multilateral banks is very difficult,” he said.
The factory, which took 3 1/2 years to complete, will require as much as 60 megawatts of electricity from the national grid, Haile said. The company paid for transmission lines and a sub-station to power the plant, according to Haile.
--Editors: Paul Richardson, Ana Monteiro.
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