Published On  Jan 15,  2012






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Industry Ministry Gives Nod to Mugher Exports

State-owned plant looks to South Sudan’s well-oiled construction boom



Officials at the Ministry of Industry (MoI) have given their nods to the desperate request made last week by managers of the state-owned Mugher Cement Enterprise to export their product to neighbouring countries, sources disclosed.

Alarmed by the drop in demand for cement, whose exact cause is yet to be identified, and a raising stock of clinker, the Enterprise has brought to market only 45pc of its target over the past six months. An earlier request for an export permit made to officials at the Ministry of Trade (MoT) was referred to the MoI, two weeks back.

An approval letter signed by Mekonnen Manyazewal, minister of Industry, will soon be given to the Enterprise and copied to the MoT, which issues export licences, according to sources at the MoI.

The Enterprise is now to apply for an export permit, which is expected to remain valid for the coming 12 months. This can be renewed on yearly basis upon presenting its contracts with buyers, according to export licensing procedures at the MoT.

The Enterprise, which has dominated the domestic market for long, claims to have found a market in Southern Sudan, which is directing millions of oil dollars to construction, and Kenya. The export market is to be undertaken through trading houses, such as BFYB, which has an import and export licence in Southern Sudan, according to sources.

However, Mugher’s will only be valid until the local demand, which is now estimated at eight million tonnes, goes up again to meet with the supply. Authorities at the Ministry would also like to see Mugher continue to supply cement to government projects while it is exporting. Indeed, it is the largest supplier of cement to mega public infrastructure works, including the Grand Ethiopian Renaissance and Gilgel Gibe III dams as well as the construction of condominium houses and roads.

“They will stop exports immediately, if we see a resurge in local demand,” an official at the MoI, who took part during the discussions, told Fortune.

CEO Mekonnen Zergaw, of Mugher, was not available for comment.

“It is good news for us,” a senior manager at the Enterprise, who was not authorised to speak to the media, told Fortune. “We could not otherwise service our debts.”

The state-owned cement plant has undergone massive expansion programmes at a cost of 1.4 billion Br, in order to add 1.7 million tonnes of cement to its previous annual production.

However, analysts in the industry see that exporting may not help Mugher benefit more than what the domestic market currently offers. Mugher sells a quintal of portland cement for 266 Br at factory gate, while the international price was 9.6 dollars in January, according to World Cement Manufactures (WCM).




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