DEVELOPMENT BANK OF ETHIOPIA

RESEARCH PROCESS

NEW COMMODITY STUDY ON

CEMENT MANUFACTURING INDUSTRY
PREPARED BY: Team 4
Kedir Beshir-Prinicipal officer
Dawit Amare-Officer
Yosef Mogus-Officer
Eyob Nigussie-Junior Officer
Gelila Worku-Junior officer
Revised by Research Process Approval Team

ADDIS ABABA
March 2009

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1. Introduction......................................................................................................................1
1.1. Objectives of the study....................................................................................................2
1.2. Methodology...................................................................................................................2
1.3. Scope of the Study..........................................................................................................2
2. Description of Cement.........................................................................................................3
2.1. Types of Cement.............................................................................................................3
2.1.1. Types of Portland cement.........................................................................................3
2.1.1.1. White Portland cement......................................................................................4
2.1.1.2. Blended Hydraulic Cements..............................................................................5
2.1.1.3. Expansive Cements...........................................................................................6
3. Raw material production and Packing materials.............................................................7
3.1. General Description of the major raw materials.............................................................7
3.1.1. Limestone.................................................................................................................7
3.1.2. Clay..........................................................................................................................8
3.1.3. Pumice......................................................................................................................8
3.1.4. Gypsum....................................................................................................................8
3.2. Characteristics of the raw materials................................................................................8
3.2.1. Limestone.................................................................................................................8
3.2.2. Clay..........................................................................................................................9
3.2.3. Pumice......................................................................................................................9
3.2.4. Gypsum....................................................................................................................9
3.3 Potential Reserves in Ethiopia on the raw materials......................................................10
3.3.1. Limestone...............................................................................................................10
3.3.2. Clay........................................................................................................................10
3.3.3. Pumice....................................................................................................................11
3.3.4. Gypsum..................................................................................................................11
3.4. Supply and Demand the raw material...........................................................................11
3.4.1. Supply of the raw materials....................................................................................11
3.4.2. Demand Projection for Raw Materials...................................................................14
3.4.3. Packing Materials of Cement.................................................................................15
3.4.3.1. Supply for Packing Material...........................................................................15
3.4.3.2. Demand Projection for Packing Material........................................................15
3.5. Utilities..........................................................................................................................16
3.5.1. Fuel and Electric energy.........................................................................................17
3.5.1.1. Furnace oil.......................................................................................................17
3.5.1.2. Coal.................................................................................................................21
3.5.1.3. Electric Power Requirement of cement plants................................................21
3.5.2. Water Consumption...............................................................................................21
4. Production Process and Production Basic.......................................................................22
4.1 Cement Production Process.........................................................................................22
4.3 Production Basics...........................................................................................................33
5. Market Study and Price Analysis.....................................................................................34
5.1. World Cement Production and Consumption...............................................................34
5.1.1 Overview.................................................................................................................34
5.1.1.1 World Cement Production................................................................................35
5.1.1.2 World Cement Consumption............................................................................37
6. Cement Production and Consumption in Ethiopia.........................................................40
6.1. Background...................................................................................................................40
6.2. Demand and Supply Picture..........................................................................................41

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 6.2.1. Existing Demand....................................................................................................41
6.2.2. Demand Projection.................................................................................................44
Ethiopian Government capital budget expenditure by sectors.....................................44
6.2.2.1 Housing............................................................................................................46
6.2.2.1.1. Low cost housing projects........................................................................46
6.2.2.1.2. Private Housing........................................................................................49
6.2.2.2. Private and public investment projects............................................................51
6.2.3. Supply of Cement in Ethiopia................................................................................53
6.2.4 Cement Supply Projection.......................................................................................54
6.2.5. Demand-Supply Gap Projection............................................................................57
6.3. Market and marketing strategy......................................................................................58
7. Price and Price Trend for Cement....................................................................................60
7.1. Domestic price trend.....................................................................................................61
7.2 Import and Export possibilities of cement Import Scenario of Cement in Ethiopia......64
8. Project Engineering and Technology Choice..................................................................67
8.1 Major Machineries Requirements for a New Cement Plant..........................................67
8.2 Building Construction Requirements of Cement Industry.............................................70
9. Organization and management Requirements................................................................77
10. Environmental Consideration in Cement Manufacturing....................................79
10.1. Manufacture of clinker and finished cement:..............................................................79
10.2. Particulate emissions:..................................................................................................79
10.3. Gaseous emissions:.....................................................................................................80
10.4. Nitrogen oxides :.........................................................................................................80
10.5. Sulfur oxides:..............................................................................................................80
10.6. Carbon dioxide:...........................................................................................................80
10.7. Strategies to reduce carbon dioxide emissions............................................................80
11. Quality Requirements......................................................................................................82
11.2 Pozzolana Portland Cement.........................................................................................84
12. SOCIO ECONOMIC IMPACT ASSESSMENTS........................................................86
13. Major Actors of the commodity......................................................................................88
14. Credit Performance of Cement Industries Financed By DBE.....................................88
15. Anticipating Problems or Constraints in Running the project....................................89
15.1. Success Factors...........................................................................................................89
15.2. Risk Factors.................................................................................................................89
16. Opportunities And Threats Analysis..............................................................................90
17. Summary, Conclusion and Recommendation..............................................................91
18. Parameters and coefficients for cement industry..........................................................93
19. References.........................................................................................................................96