Feb. 28, 2012
Messebo Building Materials Manufacturing SC, Ethiopia exported 2,000 quintals of cement to South Sudan last week.
The cement producer initiated export efforts following the drastic fall of cement prices to 230 birr form 500 birr following the entrance of new producer Derba selling for 170 birr.
Messebo acquired the permit to export cement two months ago due to the fall in prices and the sudden drops in domestic demands for cement.
South Sudan is the destination for export because of the huge demand but exports are still not highly viable as transportation is limited said an official with Messebo.
State operated Mugher Cement Factory which was unable to meet 43% of target sales in the past two quarters has also resorted to exports to Kenya, South Sudan and Djibouti according to sources.
Export is also a less attractive option for Ethiopian cement factories because the rates on the international market are actually less than what they would get on the domestic market with a quintal of Portland cement that is sold by Mughar and Messebo for 200 birr locally fetching just 11.3 dollars internationally, according to industry observers.
The prices being offered by Derba, although the product is yet to enter the market in any significant manner, is a primary reason behind the reduced demand for their product according to a manger with Messebo.
Derba cement is not yet readily available on all markets because the new company has been preoccupied with staff recruitment and training explained Haile Asegide, Chief Executive Officer.
The factory has so far been supplying unnamed construction companies and projects he claimed.
The fall in cement prices are due not to Derba but because cement factories are no longer able to create artificial demand by simulating scarcity through hoarding according to Haile.
Source, Addis Fortune
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