EEPCo Grants Cement Factory Own Power Station

EEPCo Grants Cement Factory Own Power Station Debra MIDROC’s complaints of power shortages produce 50MW fruit Derba MIDROC Cement Factory is to start cement production in early October 2011 following the decision by Ethiopian Electric Power Corporation (EEPCo) to provide the factory with 50 megawatts (MW) of electricity. The 351 million dollar factory, located 70km outside the capital in Sululta Town, Oromia Regional State, had postponed its original launch planned for June 2011. We plan to start operation with an initial daily production of 1,800tn of cement, according to Haile Assegdie, CEO of Derba MIDROC Cement Factory. The 50MW of power supplied is 15.7pc higher than the generating capacity of the Koka Dam, Ethiopia’s first hydroelectric power dam built in 1960. Once fully operational, Derba MIDROC would be the largest cement factory in the country. The factory is to start producing close to 8,000tn of cement a day, after December 2011 when production reaches full capacity, said Haile. It will create job opportunities for 500 employees. Eleven companies in the country were engaged in cement production, with a total annual production of 2.2 million tonnes at the end of May 2009/10, according to research conducted by the Ministry of Industry (MoI). Consumption of cement has increased by an average of 30pc in the four years before 2009, according to the research. The green light from EEPCo comes following a series of lobbying initiatives made by Derba MIDROC, which claims that it was forced to postpone the launch of operations because of water and power shortages. “We are grateful to have been given the power because we can now proceed with our plan of producing the targeted demand of cement,’’ Nebiyu Samuel, senior advisor and special assistant to Mohammed Al-Amoudi, told Fortune. “We have a tremendous dream of fulfilling the targeted production,’’ Nebiyu said enthusiastically. The company has started testing the machinery using the 20MW supply, and will follow through with production after the testing ends, said Tadesse Kebede, project director of Derba MIDROC Cement. The demand for cement is expected to increase as the government plans to increase the national road network from the existing 49,000km to 64,600km; build a 2,000km railway line; and construct additional housing units to raise the number from 213,000 to 700,000, as part of the five-year Growth and Transformation Plan (GTP). These projects are estimated to increase the annual demand for cement to 27 million tonnes by 2015. Derba MIDROC has contracted China National Building Materials (CNBM) for the Engineering, Procurement and Commissioning (EPC) of the project, a contract worth 200 million dollars. CNBM will also be charged with operating the factory and training the employees for one year after the start of production. It has 5,600ql of clinkers, 25pc of which will be converted to Ordinary Portland Cement (OPC) and 70pc of which will be converted to Portland Pozzolana Cement (PPC), which are two different types of cement. The factory has enough trucking capacity, with the ability to transport 80,000ql of cement to serve its customers. Derba MIDROC has an agreement with Volvo for the purchase of 1,000 trucks, at a cost of 142 million dollars, to transportation its cement. We estimate that 980 trucks could pick up the cement at the factory on a daily basis for delivery, said Tadesse. Derba MIDROC was established in April 2008 by Al-Amoudi with a starting capital of 2.8 billion Br, in order to produce 2.3 million tonnes of cement a year. The construction costs of 351 million dollars was funded by Al Amoudi, Development Bank of Ethiopia (DBE), African Development Bank (AfDB), and the International Finance Corporation (IFC) - World Bank. The factory has already started testing the machines to prepare for future production. “We have already received requests from government and private companies for housing and construction projects,’’ Nebiyu said.