Requests 60 hct plot in Amhara region
Lalibela Cement Share Company has asked the Amhara regional state for 60hct land in the Eastern Gojjam zone Dejen area, 230Km north of Addis Ababa for the construction of a plant that the company projects will have the capacity to produce 4,000 tones of cement per day.
Serawit Amene, General Manager of Lalibela Cement Share Co, said they are confident their request will be approved. They hope to finish the two year project by 2014. The company chose the location because of the abundant availability of raw materials for cement in the area and its proximity to Addis Ababa and Sudan. Midcot consulting company conducted the feasibility study.
Instead of advertising share sales it is targeting a few potential investors, although anyone can buy the company’s shares from the branches of Abay Bank which is acting as its agent.
The company plans to produce Ordinary Portland (OPC) and Portland Pozzolana Cement (PPC) with the former taking 70 percent of the produced cement share. The project requires 928,200 tones of limestone, 163,800 tones of clay, 252,000 tones of pozollan, and 84,000 tones of gypsum, which can easily be found in the region.
Serawit said the company has issued an international tender for consultancy work. However, they have not yet floated a tender for the construction of a cement factory. Talks have been going on with North American, Asian and European firms about the construction of the cement factory.
Lalibela Sh. Co was formed with the coordination of Tiret Endowment and six other entities with an initial capital of 700 thousand birr. The six other entities were the Amhara Water Construction works Enterprise, the Amhara Design and Supervision works Enterprise, Ambassel trading works Private Limited Company, Amhara regional state housing development agency, Saba Engineering PLC and Tikur Abay Transport PLC.
The company claims, according to its study, that when the factory becomes operational it will make a net profit of 563 million birr annually and shareholders will gain a net profit of more than 40 percent per share per year.
Lalibela Cement expects to get 40 percent or 880 million birr worth of shares from bank loans and the rest from selling of shares to foreign individuals or companies. It has issued 264 thousand shares for this purpose with each share valued at five thousand birr.
The company, which was formed in January 2011, believes that the Growth and Transformation Plan and increasing private sector development will mean more need for cement. Its initial estimate for the plant’s overall cost including design, construction and commissioning, made a year ago, estimated that the cement factory could consume 2.2 billion birr.
The Ethiopian government has planned, by the end of the Growth and Transformation Plan in 2015, to increase the cement production to 27 million tons of cement annually equal to the expected need of the country while also increasing the per capita cement consumption from the current 35 kilogram per person to 300 kilograms per person.