Going gets tough for cement companies

Some cement producers are having to look at exporting their output, for instance, to Somalia.

In some areas, heavy commercial trailers ferrying loads of the commodity out of the country have created traffic jams, particularly on roads in major towns in the country.

The most recent industry figures suggest Ethiopian cement exports reached $9.5 million last year, and that is now being predicted to rise to $15 million by the end of this year, according to worldcement.com.

Another set of figures, in a study issued in April by leading local producer Mugher Cement, suggest national demand is just 7 million tons.

The price of cement has also dropped considerably, from between 3,000 to 4,000 birr ($150 to $200) a ton in 2011 to the current 2,500 birr, Wei says.

Zhong Shun's output is expected to reach 170,000 tons this year, he says. The company's combined annual cement capacity, along with its other plant, East Cement, is more than 700,000 tons, but that is considered small compared with many others, he says.

Zhong Shun has 105 employees, including 15 from China.

Wei, who has worked in the cement industry for more than 20 years in East China's Fujian province, says the company's investment in Ethiopia has been considerable, not least in its training of local workers, many of whom were previously unskilled farmers mostly from nearby towns.

Ethiopia's strict labor laws are very protective, meaning salaries can only be raised, even if performance is poor and market conditions start to work against a company.

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