Habesha Cement Share Company sold 47 percent of its equity to two South African Companies for USD 21 million following a negotiation that lasted for a year and half.
Pretoria Portland Cement (PPC) invested USD 12 million to get 27 percent ownership rights, while Industrial Development Corporation (IDC) injected USD 9 million to enjoy a 20 percent investment venture in the new cement company.
“PPC and IDC decided to invest in our company after they carried out a thorough assessment of our project and found that it is a well planned and efficiently managed project with an impressive level of professionalism,” said Gizaw Teklemariam (Eng.), Board Chairman of Habesha Cement.
Habesha Cement has 16 thousand shareholders which mobilized close to 400 million birr. Besides the equity investment from shareholders, PPC and the IDC, it has secured USD 86 million project loan from the Development Bank of Ethiopia.
The company plans to build a cement factory worth USD 130 million in the first phase of its project implementation with a capacity to produce 1.4 million tons of cement per annum.
A South African cement supplier, PPC, owns eight cement manufacturing facilities and three milling depots in South Africa, Botswana and Zimbabwe. PPC has a total production capacity of eight million tons of cement per annum.
“We believe that time has come for the people in Africa to enjoy some of the development, growth and prosperity that are seen in other parts of the world. Africa’s time has come. We see development and growth all over the continent. At the moment, the development and growth is small but it is happening. We believe that the development and growth in Africa will accelerate in a few years. One of the key ingredients of development and growth is cement. It is a tough business but we regard ourselves as very fortunate to be in such an important industry. One of the rewards of being in cement industry is that you can physically see your contribution,” said Paul Stuiver, CEO of PPC.
“We have spent many hours, many days analyzing, interrogating the technical, the financial and the strategic proposal of Habesha [Cement] project. We also visited the equipment supplier in China. I might say that our conclusion is that Habesha is a world class project. It is from a technical point of view very well thought through, very well designed and from our strategic and financial point of view, a very worthwhile project,” added the CEO.
IDC, a state owned investment fund, is a development finance institution set up to promote economic growth and industrial development in 1940.
Habesha Cement plans to build its factory in the vicinity of Holeta town of Oromia Regional State, 35 kilometers to the North West of Addis Ababa.