The owners invested 860 million Br in a steel plant in Dukem
After opening in Dukem this past week, EKOS Steel Mill became the nation's 12th steel mill.
Owned by five South Korean investors, the company will manufacture reinforcement steel bars and wire rod, offering job opportunities to 92 local people and nine expats.
The new plant sits on 10ha of land in Dukem, some 37Km south of Addis Abeba in Oromia Regional State, and cost 860 million Birr to build.
The plant has the capability of manufacturing rebar sizes up to 32mm in diameter and a total production capacity of 210,000tn of rebar and wire rod annually. The company expects to produce 150,000tn of 6mm to 12mm rebar a year and has already started production of 6mm to 20mm diameter last week.
EKOS uses Liquid Proponat Gas (LPG) as a raw material supplied by Ghion Gas industries. Steel billet, the primary raw material, will be imported from Ukraine.
The owners of the company decided to invest in Ethiopia following a meeting that took place between the South Korean business community and President Mulatu Teshome (PhD) in 2013, according to Shell H. Choo, CEO of the company.
The South Korean EKOS Corporation has been in the steel business for 30 years, manufacturing hot deep galvanised sheet, rebar and other steel products.
Yerer Construction was contracted to build the manufacturing plant, which has a footprint of 15,000sqm. The project was initiated in October 2015 and was finalised in August of this year after a two-year delay due to the forex church that hampered the import of materials, according to the management of the company.
Since last Wednesday, the company has manufactured 60tn of rebar and wire rod supplied to Crenotive Printing Plc and B.K.M.Y Import Plc. It has also supplied 30tn of rebar for Ellilta General Company. The company sold the rebar for 33.66 Br a kilogram.
"We procured 30tn of rebars for the real estate we are developing," said Tadios Samuel, a shareholder of Crenotive, which signed an agreement with the factory to be a distributor of its products.
"We aimed at substituting imports," said Choo. "We are conducting marketing research to start exporting to neighbouring countries, mainly South Sudan."
The management of the company is also planning to undertake a phase two expansion that is scheduled to start next year. The expansion will push the steel production capacity to 500,000tn and include the manufacture of half of the billets it uses as inputs.
"After going fully operational [in the second phase], we will add more than 60 employees," said Choo.
EKOS will be joining the 11 other steel producers in the country, most of which are concentrated in Oromia Regional State and owned by foreign investors. These factories have a capacity of producing 5.98 million tonnes of steel annually, while the country's demand stands at 1.2 million tonnes a year.
"But actually, the companies are producing only 10pc of their capacity due to foreign currency shortages," said Fite Bekele, communications director with the Ethiopian Metals Industry Development Institute.
Along with the lack of raw materials, power supply shortage is the other reason, according to Solomon Mulugeta, president of the Ethiopian Association of Basic Metal & Engineering Industry.
The official inauguration ceremony of the company is expected to take place on October 18, 2018, in the presence of owners of the company and government officials.
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Publish date : 2018-10-08 10:14:08