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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). |
