The government of Ethiopia is not importing any cement despite rising prices in recent days because of power cuts that have forced factories to reduce production, Arkebe Okubay, state minister of Works and Urban Development (MoWUD) told Fortune.
Twelve million quintals of cement, worth US$90m, was imported by the ministry during the past year. This came to an end on February 8, 2010, because the state and private cement factories were expected to meet the local demand by producing at full capacity.
It was anticipated that those factories would not be affected by the power cuts that had plagued them during a significant part of 2008/09.
The government’s imports had helped bring down the cost of cement from Br400 to between Br192 Br and 230 Br per quintal.
Two weeks after the Gilgel Gibe II Hydroelectric Power Plant was inaugurated, however, part of the 26km tunnel collapsed, and the factories are once again working for only half a day. This led to a price hike to between Br 300 and Br 315 per quintal, almost immediately. The price change was large but that would not go any further, because there is a three-month stock for government projects, including the construction of condominiums and 13 universities across the country, Arkebe said.
The government will also not import because it expects the Tana-Beles Hydroelectric Plant to be completed in 20 days’ time, whereas it takes 90 days to deliver imports.