Pretoria Portland Cement Company acquired a 10% share in Habesha Cement, Ethiopia. The 70 million birr investment makes the South African company the largest share holder.
Pretoria Cement signed a Memorandum of Understanding to acquire a 15% share in the company December of 2010. Negotiations were delayed pending a feasibility study on Habesha cement conducted by Ernst and Young on behalf of the South African company.Habesha Cement is in the process of finalizing negotiations with another international company for a 30% stake worth 200 million birr according to Mesfin Abi General Manager. A non disclosure agreement prohibits Habesha cement from naming the party that it is in negotiations with he said.
Habesha Cement recently secured a loan of 1.5 billion from the Development Bank of Ethiopia which covers an estimated 70% of the 2.1 billion birr required to construct its plant. The company expects to raise 700 million birr on its own.
With the Pretoria Cement acquisition, Habesha meets the 30% investment required to receive the loan from the Development Bank.
In related news it is expected that an additional 4.8 million tons of cement will enter the Ethiopian market, next year, as five new factories commence production and two existing factories complete expansion projects.
The new factories that are going into production are Derba MIDROC cement, C.H.Clinker manufacturing plc, Ture Dire Cement, Ethio-Cement, and National Cement expansions in Dire Dawa and Oromia Regional State.
Expansion projects are also being undertaken on Jimma Cement factory and Dejene third and fourth phase projects which are under Derba MIDROC.
The potential cement supply of Ethiopia will reach an estimated 12.61 million tons by July of the coming year according to government estimates.
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