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The government is not importing any cement despite
rising prices in recent days because of power cuts
that have forced factories to reduce production,
Arkebe Okubay, state minister of Works and Urban
Development (MoWUD) told Fortune.
Twelve million quintals of cement, worth 90 million
dollars, was imported by the ministry during the
past year. This came to an end on February 8, 2010,
because the state and private cement factories were
expected to meet the local demand by producing at
full capacity.
It was anticipated that those factories would not be
affected by the power cuts that had plagued them
during a significant part of 2008/09.
The government’s imports had helped bring down the
cost of cement from 400 Br to between 192 Br and 230
Br per quintal.
Two weeks after the Gilgel Gibe II Hydroelectric
Power Plant was inaugurated, however, part of the
26km tunnel collapsed, and the factories are once
again working for only half a day. This led to a
price hike to between 300 Br and 315 Br per quintal,
almost immediately. The price change was large but
that would not go any further, because there is a
three-month stock for government projects, including
the construction of condominiums and 13 universities
across the country, Arkebe said.
The government will also not import because it
expects the Tana-Beles Hydroelectric Plant to be
completed in 20 days’ time, whereas it takes 90 days
to deliver imports.
Cement factories are so dependent on power that,
every time there is a cut, there is a price hike,
according to Yeneneh Zewge, a trader around Gotera
area in the Nefas Silk Lafto Disitrct.
Derba MIDROC Cement Factory, which will have a
production capacity of 25 million quintals per year,
will need 60MW of power, which currently is
superseded only by the city of Addis Abeba.
Arkebe is unfazed by the problem that occurred at
Gilgel Gibe II but says that with the completion of
the maintenance of this tunnel and the Tana-Beles
and Amertinesh hydroelectric plants, power failure
will be history in Ethiopia. |
Factories are running half the day due to power cuts
