After achieving the significant milestone against foreign suppliers, National and East Cements won the bid to supply 7.1 million quintals of cement for 1.57 billion Br.
National Cement will supply 4.2 million quintals of Ordinary Portland Cement (OPC) worth 1.01 billion Br, while East Cement will provide 2.9 million quintals of Portland Pozzolana Cement (PPC), a low-cost cement used for strength and durability, for 561 million Br.
The Addis Abeba City Government Public Procurement & Property Disposal Agency (PPPDA) announced the bid on October 4, 2017, where the cement is intended for the construction of condominium houses.
The cement will be used by Addis Abeba City Government Housing Construction Project Office to build 94,072 low-income housing units at Koye Feche and Bole Arabsa sites.
Amongst the 13 local companies that expressed interest, only six submitted their offers. Dangote, Messebo, Habesha Cement S.C, Mugher Cement and the two winning producers competed in both the technical and financial evaluations.
For the OPC, National Cement offered the lowest price of 241.39 Br for a quintal, while Dangote Industries submitted the second lowest- 255 Br a quintal. For the PPC, East Cement offered 193.50 Br per quintal, the minimum among all six followed by National Cement at 199.99 Br a quintal.
“The winning bids offered a price difference of 64.92 Br for the OPC and 35.57 Br for the PPC from the current market prices,” reads the announcement by the bidding committee.
Before refloating, the Agency announced this tender in August 2017 availing it to international suppliers as total procurement value exceeded 50 million Br. It was annulled after local suppliers objected to the inclusion of foreign companies. Later on, 17 manufacturers were keen to participate.
Currently, 15 local cement manufacturers operate in the country with an annual production capacity of 8.9 million tonnes. The nation earned 17.2 million dollars of foreign exchange from cement export last fiscal year.
The production cost of cement in the country is 90 dollars a tonne, while it is 25 to 30 dollars globally owing to the high import costs of fuel and coal.
To decrease these costs and enhance the competitiveness of the product in the market, a study by National Cement and stakeholders from governmental and educational institutions is underway. The research focuses on biomass energy using Prosopis Juli flora, a weed growing in Afar and Somali regional states, to replace coal.
Messebo Cement Factory was the first to shift from coal to biomass after erecting a biomass energy processing plant with an investment of 109 million Br.
For the operational cement manufacturers and three other industries, the Ethiopian Petroleum Supply Enterprise (EPSE), procured 700,000tns of coal this fiscal year worth close to 1.2 billion Br from two international coal suppliers: Riftcot Limited and HC Trading Plc.
Source : AddisFortune