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Aliko Dangote’s $600m Cement Plant Threatened In Ethiopia

The investment activities and operations of Dangote Cement, owned by Africa’s richest man, Aliko Dangote, is being threatened by new government order in Ethiopia.

“Dangote may quit its cement operations in Ethiopia if authorities in the central state of Oromia don’t reverse an order to cement makers to hand over control of some parts of their businesses to local young people,” the US-based media outlet, Bloomberg reported yesterday.

Addisu Arega, head of the Oromia Communications Affairs office, told The Reporter that all cement factories in the regional state, including Dangote are operating very smoothly.

According to him, the regional government has discussed thoroughly with all cement factories including Dangote to handover their pumice and sand mining areas to unemployed youths in the region. As per the discussion, all cement factories have agreed to surrender some of their mining interests to play their part in the job creation efforts in the region.

Dangote Cement is willing to support the job creation endeavors of the Oromia Regional State, Onne Van Ser Wejide, Chief Executive Officer (CEO) of Dangote Cement, based in Lagos, told Bloomberg in March.

“The Nigerian company is discussing the proposal with Oromia officials and may be willing to sign contract. As long as that does not involve higher costs and lower quality and the quantity can still be delivered,” he told the news outlet.

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Two months after, however, the company said it may shut its operations in Ethiopia if authorities in the central state of Oromia do not reverse an order to cement makers to hand over control of some parts of their businesses to local young people.

This time, Dangote’s Executive Director, Edwin Devakumar, also based in Lagos, told Bloomberg that the company will write to the federal government this week to ask it to intervene and will consider shutting the plant in Mugher, about 90 kilometers (56 miles) north of Addis Ababa as a “last option” if this fails.

Transport Bureau head of the region, Takele Uma, who is also member of the Public Private Partnership Council of the region, on this part, told The Reporter, local newspaper that no communiqué was received from Dangote to be discussed by the regional cabinet, thus far. According to him, the Oromia cabinet is willing to discuss and redress the problems if Dangote comes officially.

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“However, we are not prepared to give special treatment to Dangote especially at the expense of our unemployed youth,” he told The Reporter.

Dangote Cement started operation in Ethiopia in June 2015 inaugurating its USD 600 million plant with annual production capacity of 2.5 million tons.

Apart from original cement plant, Dangote has invested in PolyPropylene (PP) bag manufacturer in the same locality.

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