On the outskirts of Addis Abeba lies the subdued Qaliti cement market with retailers like Tsigereda Eshetu gazing for customers that may be interested in their products. The price for a quintal of cement has sharply dropped by 27pc to 1,700 Br.

Over the past two weeks, demand has remained neutral. Tsigereda, who sources her stock from Dangote and Habesha factories, hopes for a turnaround.

“Buyers will come,” she said. "Perhaps when the market stabilises further."

For Yigerem Tewodros, another retailer, the issue lies deeper. He blames the outsized role of middlemen and brokers in inflating prices and disrupting the market, calling for structural changes to alleviate traders’ woes.

“We need direct access to manufacturers,” he told Fortune.

The cement industry is changing, spurred by recent government reforms. These include granting manufacturers autonomy in setting distribution prices, a shift designed to address inefficiencies and stabilise the market. However, difficulties such as power outages, security concerns, and low-quality coal continue to plague the industry.

The Ministry of Trade & Regional Integration (MoTRI) has introduced measures to liberalise the market, notably removing restrictions on manufacturers' gate prices. Minister Kassahun Goffe (PhD) recently noted the need to boost production capacity. Ethiopia’s annual cement production stagnates at seven million tons, far short of the 36 million tons demanded by the booming construction industry. Kassahun urged manufacturers to achieve 80pc operational capacity, which could yield up to 20 million tons annually.

Lemi National Cement—inaugurated by Prime Minister Abiy Ahmed (PhD) two months ago—is anticipated to play a major role. With a daily production capacity of 150,000qtl, the plant represents a potential game-changer for a market beset by shortages. East African Holding, a major shareholder, has already begun distributing cement, stabilising prices and boosting supply.

Industry veteran Mesfin Abi, a founding CEO and current board member of Habesha Cement, supports the move. He criticises past government price controls, arguing that they exacerbated shortages and favoured intermediaries. Mesfin sees the reforms as a step toward aligning supply and demand, though other hurdles remain.

Habesha Cement, one of the larger plants, has faced its share of struggles. Despite a half-million-ton annual output, the company has struggled with market access and profitability. Recent restructuring efforts, including machinery upgrades and a shift to domestic coal, have begun to bear fruit, raising daily production to 3,000tns. Business mogul Getu Gelete’s acquisition of a 40pc stake has further bolstered the company, though security threats near its Holeta quarry, in Oromia Regional State, remain a critical concern.

Mesfin acknowledges that the company’s resurgence has been gradual.

Cement plants need high-quality coal for optimal operation. Research by Yemanebrhan Kiros, manager at Yomener Energy Auditing & Engineering Plc shows that local manufacturers need a total of 100tns of coal a day on average. However, local coal has a lower calorific value, impacting efficiency. Security issues and a lack of washing plants further limit availability and quality. Surface-level extraction and the absence of advanced mining techniques contribute to impurities and low energy content in local coal.

Mugher Cement, another major player, illustrates the broader struggles. Frequent power outages, compounded by the lack of quality coal, have intermittently halted operations.

CEO of Mugher Gezahegn Dechassa accentuated coal shortages and supply chain disruptions as key issues. He cites their operation around Southern Regional State where access to mining sites has been limited, and coal prices have inflated to 6,000 Br a quintal.

For several years, the company has shared transmission lines with other manufacturers, leading to frequent disruptions. The shared substation also serves many households, further impacting Mugher Cement's power supply.

Gezahegn disclosed that negotiations with Ethiopian Electric Power (EEP) are ongoing to secure dedicated transmission lines.

“Power shortages remain a major concern,” he said.

However, officials from EEP assert that there is sufficient power with efficient transmission enough to support cement manufacturers. Moges Mekonnen, communications head, disputes claims of inadequate power, asserting that most manufacturers now have access to separate transmission lines and substations. Yet inefficiencies persist, with power interruptions often resulting in costly downtimes for factories.