Seven of the 11 cement factories are determined to set up a new industry lobby group following disputes over a series of measures enacted by the federal government in recent months.

Cement retail prices have surged to around 2,000 Br a quintal as the stocks of retailers and wholesalers across the country are depleted following a directive last July, which sought to end the distribution of cement through agents.

Gebremeskel Chala, minister of Trade & Regional Integration, followed the directive up with a price cap. He instructed factories to sell a quintal of cement to designated distributors between 770 Br and 870 Br.

Two weeks ago, the Ministry adjusted the price cap, forcing cement factories to sell a quintal of cement for between 510 Br and 683 Br to distributors.

The measures have proved ineffective and have led to protests from supply chain actors and regional administrations.

The existing industry lobby group – the Cement Producers Association – filed a complaint with the Office of the Prime Minister a week ago, arguing against the price cap. Haile Assegide, general manager of Derba Cement, heads the Association.

The deteriorating market conditions have pushed seven cement factories to go ahead with plans to establish a new lobby group – the Cement Owners Association. Their ranks include Habesha, Kuyu and Ethio cement.

Industry executives have complained about the price caps to Trade Ministry officials through written correspondence and in face-to-face discussions.

Fitsum Demisse, CEO of National Cement, says the existing lobby group's perceived failure to address the issues have stoked the need for a new association.

Established by Italian nationals in 1936, National Cement operates a plant in Dire Dawa, around 500Km east of Addis Abeba.

Owned by Bizuayehu Tadelle, a businessman running East Africa Holdings, the plant can produce up to 3,000tn of cement a day. However, according to Fitsum, it is producing only three-quarters of its capacity.

The CEO attributes the decline in production to a scarcity of coal. His factory sources coal from small-scale miners in Kamashi Zone, Benishangul-Gumuz Regional State.

Although the Ethiopian Petroleum Supply Enterprise is tasked with importing and distributing coal, it has not procured the input from abroad in recent months due to a shortage of foreign currency.

“We've finished the process to establish the new association," he told Fortune. "We'll announce it in the coming week.”

Federal officials claim to be unaware of the developments.

"We're aware of the complaints but we don't have any information about the establishment of a new association," said Kumneger Ewnetu, communications director at the Ministry.