A company that makes homes from material that has the potential
to dramatically reduce the price of homes in Addis became the latest to compete in the booming construction industry. Addis Prefab Houses Manufacturing Industries Share Company floated 29,000 ordinary shares to the public with a par value of 1,000 birr last Thursday at an event held in the new Radisson Blu Hotel.
The company plans to produce 10,000 prefabricated homes which are expected to create job opportunities for 4,000 workers. The homes are said to be durable, efficient and inexpensive. They will include luxury villas and condominiums.
According to data collected from contractors, a house made of wood and mud roofed with corrugated iron sheet seven years ago by the Addis Ababa City Housing Development Agency cost around 545 birr per square meter. However, that cost has now risen to 1,250 birr. This makes it almost impossible for many middle class people to own a home, rendering prefab homes very attractive.
“Using prefab housing technology reduces the cost of a home from 30 to 40 percent. A person could save 500 percent of the time it takes to build a conventional house. For example, one can have a ground plus one house in 45 days using prefab technology. This saves cost both in terms of time and resources,” argued Gezahegn Yaynashet, the board chairman of the under formation share company.
Manufacturing houses in a factory has been practiced for over half a century in Western countries. It is done by using a load bearing wall floor structure made of light gauge steel, he explains.
Such system of constructing a house is more efficient and low cost, construction process experts argue.
The company was established by six founders with seed money amounting to 900,000 birr. It needs 97 million birr in its first phase of operation. The promoters of the new share company aspire to mobilize 29 million birr from public investment while the balance is planned to be secured from banks through project loans.
The minimum share purpose is 25 while the maximum investment is 500 shares. Investors will be tasked to pay a 10 percent service charge. In relation to terms of payment, potential investors are expected to pay 60 percent of the total investment amount up on subscription, 20 percent after three months of general assembly, and the remaining 20 percent after three months of the second payment. Shares are open for public sale from February 16 to April 16, 2012.
Despite its long history, Ethiopia remains one of the least developed countries in Sub- Saharan Africa. Ethiopia’s urban population stands around 11 million people. This represents only 16 percent of the total population of the country which currently reached 83 million. With an average population growth rated of around three percent, the country needs 600,000 additional houses in the coming decade alone according to information obtained from Addis Ababa City Housing Development Agency. This implies an additional housing demand of 60,000 units per year.