Habesha Cement Share Company (HCSCo) announced that the construction of its cement plant will start by early next year.
Mesfin Abi, CEO of HCSCo, told journalists that Eastern and South Africa Trade and Development Bank (PTA Bank), one of the two financers for Habesha, has opened a letter of credit (LC) to the contractor on December 19, 2013.
A year ago Habesha agreed with the Development Bank of Ethiopia (DBE), the state owned financial institution, for the financing of 30 percent of the total investment that the company needed. Subsequently, DBE and Habesha signed a deal in November for 660.3 million birr loan.
The cement factory has been assessing international financers for the implementation of the project; especially for the project’s imported items.
“As the required financing is already at our disposal, the remaining task is to proceed with the implementation of the project as per our agreement with the contractor,” Mesfin said.
According to the management of Habesha, the company invited eight international financers who can provide loans at lower interest rates to offer their proposals. “A favorable offer was received from PTA Bank and a 50.5 million dollar loan agreement was signed on August 25,” he further explained.
Currently, a 10km long standardized road that leads to the raw material site is underway and an international bid has been floated for the supply of 8,000 tons of reinforcement bar and an agreement is to be signed with the supplier.
Other tasks, like the erection of a crusher plant that would facilitate the civil work and water well drilling have been completed.
Habesha Cement awarded the engineering, procurement, and construction (EPC) tender for its cement factory to Northern Heavy Machinery Industries Shenyang Co Ltd (NHI), a Chinese engineering company.
Mesfin said that the factory will begin production at the end of 2015 at its plant that is to be erected on 30 hectares of land near the town of Holeta, 35Km west of Addis Ababa. Habesha will crush 3,000 tons of clinker and produce 1.4 million tons of Portland Pozzolana Cement per annum.
Previously, the company was scheduled to start production by 2014, but delay in securing finance forced the cement factory to postpone production until 2015.
Currently, the paid up capital of the company is over 775 million birr with 16,300 shareholders. Pretoria Portland Cement (PPC) Company Ltd, and Industrial Development Corporation (IDC) jointly acquired 47 percent equity in Habesha Cement in July 2012, injecting an additional 21 million dollars.