One of Ethiopia’s wealthiest investors, Worku Ayetenew begins a process to build a cement plant with an investment capital of USD one billion. This will be the biggest investment he has ever made, next to the five billion birr edible oil plant he inaugurated last year, with his latest venture being in Ahadu Bank.
Worku is the latest to join the lucrative cement market, with renowned tycoons, Buzuayehu T. Bizenu, owner of National Cement, and Al Amoudi, major shareholder of Derba Cement, staying in the business for over a decade. Another businessman, Getu Gelete, recently purchased a 40 percent stake in Habesha Cement from Pretoria Portland Cement Factory Ltd.
The cement market has also attracted the attention of global investors after the government opened the sector to foreign competition with an investment regulation approved two years ago. National Cement collaborated with a Chinese company to establish a USD 2.5 billion cement plant in Ensaro, Amhara Regional State.
Worku is also seeking a partner for the new cement factory, while he has already requested to lease 150 hectares of land for the construction of the plant, which is located around Dejene town, Amhara Regional State, 230 km away from the capital.
“We have already finalized preparations to complete the construction in the next two years,” said Kassim Siraj, project manager of the plant, which will be called W.A Cement Factory.
Six companies have already been shortlisted by the company to pick suppliers for the design, supply, construction, erection, and commissioning of the plant.
WA is the fourth cement factory that is expected to join the industry in the coming two years, after Abbay, Berenta and Lemi, the joint venture projects of National Cement.
Currently, there are 13 cement companies that are operational, with an installed capacity of 15.4 million tons. However, their actual capacity is only 6.3 million tons, which is an outcome of an aging machinery and lack of maintenance, among others.
Officials expect that companies in the pipeline will narrow the current demand-supply gap, while existing factories will use at least 85 percent of their installed capacity on average.