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C & E Brothers Steel Factory Plc, the biggest steel manufacturer in the country is going to construct its own power substation at its manufacturing compound.
The company that undertook massive expansion in the past couple of years plans to build the private substation with the goal of tackling power interruption which is affecting its production.
“We have finalized the design and feasibility study,” Wendifraw Belete, General Manager of C & E Brothers, told Capital.
The study has been approved by the Ethiopian Electric Power (EEP) and Ethiopian Electric Agency. The two bodies, which are responsible for supervising the project, are expected to approve the required material request.
The substation will help the factory to cut the power interruption, currently the factory gets power from the national grid.
“A high-tension power line is available nearby our factory so we don’t have that much investment in the transmission line side,” he said.
Currently the factory is allowed to use 15MW by EEP but the actual demand is 22MW. “Due to power limitation we have to shut down some production lines,” the General Manager added.
According to the plan the new substation will have a capacity of accommodating 40MW.
“We have massive plans for the near future so that is another reason to build the substation,” Wendifraw said.
The project that is expected to be finalized in the coming six months will consume 120 million birr.
High-tech machines that we are using now require no power interruption, so you must have access to sustainable power for production otherwise the loss will affect the production process. “Even though the investment cost is very high we will be efficient and productive,” he added.
This kind of investment managed by the private sector is new for the country, according to experts.
Misikir Negash, Public Relation head EEP, told Capital that currently the government carries out the substation projects by itself for industry parks.
“If companies manage this kind of operation on their own it can reduce power waste,” experts explained.
In a related development C & E Brothers Steel Factory started producing wire rod two weeks ago, which is in high demand from the nail manufacturing and the construction sector.
Steely R.M.I, the other local steel giant, is a pioneer in wire rod production, while C & E Brothers has become the other Ethiopian wire rod producer in the country.
Recently, Eastern Steel, a Chinese steel manufacturer located in the Eastern Industry Zone, also started wire rod production.
In the beginning of the current budget year C & E has finalized massive expansion, making the company the biggest steel manufacturer in the country. The production capacity of the factory has reached up to 500,000 metric tons per annum.
“The wire rod production capacity of the company is 125,000 metric tons per annum,” Wendifraw said.
The total investment cost for the expansion that does not include the working capital is 700 million birr.
Steely RMI, which has a capacity of producing 120,000 metric tons wire rod per annum, commenced its wire rod production in March 2014. Eastern Steel has a production capacity of 100,000 metric tons per annum, according to the information mentioned on its website.
Even though the local production capacity is over the demand the product is still imported.