• The market for cement—a vital input to Ethiopia’s growing construction industry—
has recently experienced turbulent conditions, including the closure of two major
producers, a sudden price spike, and a restriction of private cement imports.
• Reflecting still low domestic supply, fast-growing demand, as well as the policy
environment, cement prices have been on an upward trend for quite some time.
• A recent government decision to import cement mirrors the emergency actions taken
to address rising wheat prices some months ago and will very likely help stabilize
prices. However, not all of Ethiopia’s cement users will be beneficiaries of this
scheme. In fact, for buyers without access to cement at designated government
outlets, we think domestic prices will not fall much below current levels of Birr 275-
300 per quintal up to at least late 2010.
May 27, 2009
Access Capital Research
The market for cement, one of Ethiopia’s main manufactured products, has experienced turbulent conditions in
recent months. The most recent development was a May 8, 2009 directive from the Ethiopian Electric Power Corporation
(EEPCo) instructing the nation’s two largest cement producers to close for a month due to severe shortages in power supply.
A week after EEPCo’s decision was made public, cement prices rose from levels of around Birr 275 to over Birr 360 per
quintal, or a jump of 31 percent. These events follow an April 2009 ban on private sector imports of cement which follows a
period of about two years when private sector imports had been permitted on a franco valuta basis.
The very unsettled conditions being witnessed in recent months reflect Ethiopia’s still limited supply of domestic
cement as well as fast-growing demand. Until recently, cement was manufactured in only six factories, but this figure is
now up to eight factories producing a total of 2.6 million tons