The government's plan to use coal as a fuel for
cement factories is about to be realized with the
Ethiopian Petroleum Enterprise (EPE) awarding a 29.5
million dollars contract to Huyton Inc Company. It is
represented by P.G. Phillipas, an England business
man who has won the supply of various procurements
made by the government over the past three years.
The contract is to be signed this week.
Only three companies had responded to an invitation
extended to 61 companies to supply coal. Along with
the winner, HMS Bergbau, a German international coal
trading company established in 1995 with four
million euro, and Wibyan, an Indonesian Company, had
responded to the invitation.
Wibyn was disqualified for not providing a bid bond.
The remaining two had passed to the technical
evaluation. However, it was the company represented
by Phillipas that offered the least price of 45.35
dollars for a tonne while HMS offered 51.85 dollars.
Phillipas is not new to supplying huge amounts of
goods to the government. He had recently supplied
300,000tn of wheat.
The EPE is to conclude a one year contract with
Huyton for the importation of a minimum of 650,000tn
of coal a month which is expected to arrive next
month. This will see the government getting closer
to replacing heavy furnace oil, which costs a lot in
foreign currency. To see this through, the
governemtn had set up a task force comprised of
representatives from EPE, Maritime & Transit
Services Enterprise (MTSE), Ministry of Industry (MoI)
and five cement companies.
With plans to have cement factories use coal in
three months time, the team was scrambling to
accomplish their specific tasks as of July 2011.
The EPE was first tasked with finding pet coke
supplier which had proven unsuccessful. It had
turned to coal which is regarded as the second best
alternative source of energy next to pet coke.
The EMTSE, which was tasked with preparing
transportation and port facilities for the unloading
of the coal hand is to sign a contract with the
Djibouti port this week, according to an official
from the MoI.
The two countries had agreed on the general terms of
the import one month ago when Yigzaw Mekonnen,
director of general of EPE, and Mekonnen Abera, head
of EMTSE, were in Djibouti. The agreement is to be
based on the terms of the deal discussed with
Aboubaker Omar Hadi, chairman of the port.
This is welcomed by cement factories some of whom
were importing coal on their own. They anticipate
prices to be lower than what they used to pay.
Although there is no telling what the price will be
during distribution, the government has more
bargaining power than individual companies,
according to one marketing manager of a cement
While the government was looking for suppliers,
Messebo Cement and National Cement factories had
teamed up to import coal at a reduced cost. They had
imported 41,000tn in July.
From now on, cement factories are not allowed to
import coal as the EPE ordered the imports based on
the reported demand of cement factories.
With the exception of East and Mugar factories,
which do not have the necessary facilities to use
coal, the demand of the 18 factories currently
operational and those that will enter the market was
set at 896,500tn. Out of this, the highest amount,
22,000tn is consumed by Messobo and Derba Midroc,
which will become operational in a monthís time,