Cement is a widely used construction material in Ethiopia. Although the cement industry is a booming business, the growing population and the rise in construction activities are increasing the demand for cement products.
In the meantime, the wide usage of cement on all constructions as well as on some productions is reducing the supply of the product on both types; Portland Pozzolona Cement (PPC) and Ordinary Portland Cement (OPC). The country has had a steady supply of cement products up to recent years. Even some of the existing cement plants were engaged in the export of their products to neighboring countries like Djibouti, Somali Land, and Somalia. However, starting from 2021, the user sectors were struggling to cope with the shortage of cement and rising prices.
To assure a sustainable supply chain, the government has prepared a guideline that will go into effect a year ago in an attempt to solve the chronic shortage of cement products in the market. However, the lack of supply and the rising inflation of prices could not be stopped.
This high demand created the need to increase production for the existing producers. It requires the producers to use their facilities at full scale or to go for expansion investments. For example, as part of its continuous effort to be a prominent player in the industry, National Cement (East African Holdings) is currently working to boost its production at its existing plant at Diredawa and also launched its new billions U.S. dollars worth project to build a new plant, which is to be carried out in Lemmi town, Ensaro Woreda (District) of the Amhara Regional State. It’s about 130 km north of Ethiopia’s capital Addis Ababa.
Another solution to curb the created supply shortage is to invite other new international firms which are engaged in the production and supply of cement products into the Ethiopian cement sector. This helps the sector to introduce new production technologies and knowledge transfers while contributing to the availability of the product to the market.
One of the major focus areas of the manufacturing industry development plan of Ethiopia is encouraging manufacturing industries that utilize locally produced inputs. The aim is to create employment opportunities by improving the production and productivity of existing manufacturing plants and by attracting new high-quality investments; to expand manufacturing industries that can produce strategic commodities that can substitute imports; producing high-quality export goods in volume and variety; to increase the share of manufacturing in the GDP by creating a conducive environment for improved participation of private investors in the sub-sector, and to ensure that the development of manufacturing industry is consistent with the country’s sustainable and green economic development strategy. Thus, as a manufacturing industry, the Cement manufacturing Sector needs much and proper attention from all stakeholders and the authorized office of the government as well, before the problem is exacerbated to its high level.