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With an eye to cutting its production costs by half,
Messebo Cement Factory, located in Mekele, purchased
120,000tn of coal from a South African coal
processing company, LOESCHE, which will be used to
burn clinker, a major input in the production of
cement. The Factory has also procured coal firing
machinery from a Chinese company, HELFE, which will
arrive at the Port of Djibouti in September 2007.
Clinker, which combined with gypsum becomes cement,
is a combination of limestone, sandstone, iron ore
and shell that is ground and enclosed in a 1,400
degree centigrade furnace before final use.
The decision to import the coal was made following a
feasibility study made by the Factory on the
advantages of using coal rather than fossil fuels to
burn the clinker. The study revealed that resorting
to the consumption of coal would lower the Factory’s
primary input cost by half.
“The continuous rise in the price of fuel compelled
us to switch to the consumption of coal for burning
the clinker,” Hatse Berhe, general manager of
Messebo told Fortune.
LOESCHE, an independent and family owned franchise,
has subsidiary companies in Brazil, India, China,
Spain, the United Kingdom (UK) and the United States
(US). It supplies coal, dry grinding plants for
cement as well as power generation industries and
incineration systems for decontamination and thermal
plants for cement factories.
Messebo, one of the 13 subsidiary companies of the
Endowment Fund for the Rehabilitation of Tigray
(EFFORT), has an annual production capacity of
630,000tn, enjoying a 30pc market share in the
cement industry.
The Factory is located on the outskirts of Mekele,
the seat of the Tigray Regional State, 780Km north
of Addis Abeba. Messebo, which is one of the major
domestic cement suppliers next to Mugher Cement
Factory, currently uses fossil fuels to burn clinker
subjecting it to a 200 million Br annual cost. This
accounts for almost 60pc of the total input cost of
the factory, according to Abera Desta, chemist at
Messebo.
“The change in primary input will make the Factory
competitive when the newly established firms launch
their operations,” said Abera.
At a project cost of 75 million Br, the production
process turnabout aims at lowering prices in an
increasingly competitive cement market fuelled by a
booming construction sector.
According to studies conducted this year by
companies who are interested to enter the
manufacturing sector, the aggregate demand for
cement was increasing by 10.2pc in the past decade,
while this figure was 14.5pc when calculated for the
past five years.
MIDROC Derba, Dejen Cement, Ethio Cement, Jema Plc
and East Cement are among the 10 new entrants to the
sector in a bid to exploit the 2.4 million tonnes
annual demand in the country. When going
operational, these firms are expected to ease the
pressure on cement prices by boosting the current
1.6 million tonnes supply.
Messebo is not the only firm interested in using
coal for its cost effectiveness, though it is the
only one that is actively working on the
implementation. Mugher also has a plan to switch to
coal utilisation in its cement production process.
Tefera Abebe, general manager of Mugher, told
Fortune that the Factory is conducting a study
on ways of exploiting coal in Jimma.
The largest state-owned producer, Mugher Cement
Enterprise, located 105Km west of Addis Abeba, has a
capacity of supplying 876,000tn of cement a year.
The oldest and smallest plant, Dire Dawa Cement
Factory, 515Km east of Addis Abeba has an annual
production capacity of 72,000tn.
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