Dangote May Shut Down Ethiopian Cement Plant over lingering Dispute

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Dangote Cement Plc, owned by Africa’s wealthiest man Aliko Dangote, has revealed that it is considering closing its Ethiopian Cement factory if the government refuses to rescind an order that cedes control of certain aspects of its business to young indigenes.

The new law, made by authorities of Oromia state’s East Shewa Zone in which the Dangote plant is situated, orders the Nigerian cement manufacturer to source several materials including sand, pumice and clay mines from young Ethiopians.

Authorities say that failure to adhere to this order would mean the manufacturer bears all costs that may arise from problems noticed during the production value-chain.

This move is aimed at reducing employment within the region by forcing jobs into the hands of those who would be engaged to supply these materials.

But Dangote Group believes any disruption in the supply of these materials could ground operations at the plant, particularly when it is forced to patronize unproven suppliers.

It also notes that disruption could throw a significant number of those under its employ back into the streets, flawing the unemployment case made by backers of the policy. This was revealed by Dangote Executive Director Edwin Devakumar in an interview with Bloomberg in Lagos.

Dangote Cement Plc currently employs about 1,500 people for its Ethiopian factory. It says about 15,000 make a living as a result of its presence in Oromia.

Authorities, however, are standing firm on their pronunciation. Tekele Uma, the head of Oromia’s transport authority, told Bloomberg that it’s intention is not to send to the cement maker packing but remains adamant that it must adhere to the laws prescribed for business operators.

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