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Mugher Cement faces calls for urgent reform as market share falls

Capital Ethiopia · 2 hours ago · Read the Full Story on Capital Ethiopia
Mugher Cement faces calls for urgent reform as market share falls
AI SUMMARY

A federal performance audit reveals that Mugher Cement Factory's market share has dropped to 9.77 percent amid severe production, procurement, and management challenges.

  • Mugher Cement Factory's share of the domestic cement market has fallen to about 9.77 per cent, ranking it fourth behind Dangote, Derba and National.
  • A performance audit by the Office of the Federal Auditor General (OFAG) covered the period from the 2015 Ethiopian fiscal year through the second quarter of 2018.
  • Management planned to produce about 2.1 million tonnes of clinker between the 2015 and 2017 fiscal years, but actual production reached 1,522,011 tonnes.
  • Out of 4,768,898 tonnes of limestone, clay and sandstone scheduled for quarrying, the factory extracted 3,416,492 tonnes.
  • Production Line One achieved 75.8 per cent of its target, producing 812,268 tonnes against a planned 1,070,801 tonnes, while Line Three achieved 72.5 per cent, producing 1,336,715 tonnes against 1,843,140 tonnes.
  • Production Line Two experienced prolonged stoppages and failed to consistently produce clinker or cement.
  • The audit identified procurement shortcomings, including spare part and machinery purchases made without required technical evaluations or finalized contracts.
  • Inadequate preventive maintenance and spare-part shortages left critical equipment such as kilns, mills, motors and conveyors idle for extended periods.
  • Production figures submitted to the Chemical Industry Corporation often lacked complete supporting documentation, and inventory controls failed to fully account for warehouse stocks and damaged goods.
  • The audit identified cases where distributors bypassed competitive tendering procedures or received allocations despite losing formal bids.
  • A backlog of uncollected revenue from historical credit sales has limited the factory's working capital and ability to finance routine operations.
Read the Full Story on Capital Ethiopia
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