Displaying items by tag: Tanzania
Tanzania: Tanga Cement Company has launched a US$160m expansion project that includes building a new clinker production line. Tanga board chairman Lau Masha said that the project was scheduled for completion by the first quarter of 2015.
"Apart from increasing our clinker manufacturing capacity to match the current cement grinding capacity, this project will also reduce cement manufacturing costs, improve quality and increase cement availability," said Masha.
He said that the first phase of the plant expansion project, which involved installation of cement mill number two between 2009 and 2010, increased the plant's cement grinding capacity by 73% to 1.3Mt/yr. However clinker production capacity remained at 500,000t/yr with the short-fall being covered by imports.
Tanzania: The Tanzanian government has formed a seven person team to investigate alleged subsidies, tax evasion and the quality of cement imported from Pakistan. Minister for Industry and Trade, Dr Abdallah Kigoda, said that the team will help to understand the quality, manufacturing cost and selling price of cement from Pakistan to help in creation of fair competition in the local market.
The team comprises experts from the Ministry of Finance and Economic Affairs, Ministry of Industry and Trade, local cement manufacturers, Confederation of Tanzania Industries (CTI), Tanzania Bureau of Standards, Fair Competition Commission and Tanzania Revenue Authority.
In 2012, over 200,000t of cement was imported from Pakistan to Tanzania and in 2013 over 300,000t had been imported, according to Director of Policy and Advocacy with CTI, Hussein Kamote. Currently Tanzania has a demand for cement of 4Mt/yr with a cement production capacity of 3Mt/yr.
Tanzania: Tanga Cement Company (TCC) has raised concerns over the perceived failure by the government, through its 2013/14 national budget, to address indiscriminate imports of untaxed cement, particularly from Pakistan.
"I was a bit disappointed to see that the government has not taken stern measures to appropriately tax imported cement and curb all loopholes for tax evasion," said TCC Managing Director, Erik Westerberg, who highlighted that untaxed cement imports were not only denying the government significant tax revenue, but were also subjecting local manufacturers to unfair competition. He asked the government to take tough action against tax evasion in the interests of the national economy and domestic industries.
Tanzania's cement manufacturers are increasingly concerned about cement being smuggled to the Tanzanian mainland via the island of Zanzibar.
Tanzania: Dangote Cement has started construction of a US$500m cement plant in Mtwara, Tanzania. The 3Mt/yr plant is expected to be completed by March 2015. Company president Aliko Dangote said commencement of the Tanzania plant is part of the strategy of the group's strategy to increase its cement production capacity to at least 29Mt/yr by 2015.
"Our investment in this sector, which is outside the traditional mining sector, is to take advantage of the abundance of limestone in the country and work towards making Tanzania self-sufficient in cement production. We must commend the government and people of Tanzania for recent public sector and banking reforms as well as revamped and new legislative frameworks, which have spurred private sector-driven investment," said Dangote.
Tanzania: Tanga Cement has accused cement imports into Tanzania via Zanzibar of undermining the prospects of local producers and dodging tax. Managing Director Erik Westerberg made the comments at Tanga Cement's 2013 annual general meeting. A report covering the meeting by All Africa Global Media placed the tax loss at about US$9.2m/yr.
According to Westerberg, cement consumption in the semi-autonomous province of Zanzibar appeared to be three or four times that of mainland Tanzania despite the absence of any major infrastructure or construction projects. Westerberg appealed to the government to take action and protect mainland cement producers from smugglers along the Indian Ocean coast.
Tanzania: The Tanzania Portland Cement Company (TPCC) has reported a 22% increase in net profit to US$37.9m in 2012 from US$31.2m in 2011.
The company's turnover increased by 15% to US$153m from US$134m. Cost of sales rose due to double-digit inflation rates and energy tariffs rising to US$80m in 2012 compared to tariffs of US$72.5m in 2011. The Tanzanian Shilling remained relatively stable compared with major trading world currencies in 2012, depreciating by less than 1% against the US Dollar.
According to the TPCC statement of audited results, local cement producers were exposed to foreign imports in 2012 as East African Community (EAC) governments decided not to reinstate suspended duties on cement in the common external tariff. The TPCC board has also approved further expansion with a new cement mill in 2013.
Tanzania: The Tanzanian government has rejected calls by local cement companies to place trade barriers on imported cement because local production is still insufficient. Tanzania's Minister for Industry, Trade and Marketing, Dr Abdallah Kigoda said that despite the expected progress from cement industries, the government will still allow cement imports until local producers meet domestic demand.
Kigoda admitted that although imported cement is sold at a lower price compared to locally-produced cement, it should stand as an 'eye opener' for local industries to become competitive. Tanzania has three cement factories: Tanga Cement, Mbeya Cement and Twiga Cement. Another four plants are under construction. The country's cement production capacity stands at 3.25Mt/yr with actual demand placed at 4Mt/yr.
"In order to control importation of more cement local factories had to increase production to meet the demand as the country was surrounded by potential market opportunities such as Southern Africa Development Community (SADC) and the East Africa Community (EAC)," said Kigoda. He also mentioned other challenges facing the domestic cement industry such as a unreliable power sources and high distribution costs caused by poor infrastructure.
However bad the multinational cement financial reports get as they tighten their operations remember that it could be worse. For example, they could face the challenges the East African Portland Cement Company (EAPCC) has confronted over the last year. Reuters broke the news this week that EAPCC had widened its loss to US$9.96m due to poor sales, a major plant breakdown and labour unrest. All of this occurred in a construction economy demanding ever more cement.
EAPCC has seemed surrounded by controversy over the last year starting with a conflict of interest issue raised over a change in clinker supply in December 2011. This then led to the removal of the company's directors by the Kenyan government, which in turn led to a strike. In the chaos a worker was shot and wounded. On top of that the report reveals that there was a 'major' breakdown in one of the plant's kilns. It's a wonder that EAPCC didn't make a greater loss in the 2011-2012 year.
Demand for cement in Kenya and in the other countries in the east African region is growing. Data from the Kenya National Bureau of Statistics in December 2011 showed that cement consumption in Kenya rose by 12% in the nine months to September 2011. As reported last week in GCW72, ARM Cement (formerly known as Athi River Mining Ltd) reported a net profit of US$9.71m for the first nine months of 2012. This marks a 328% growth in profit compared to the same period in 2011 when it made US$2.26m. Meanwhile this week it was announced that Ethiopia is about to open its second cement plant in the town of Dire Dawa. More plants are on the way. Over in Tanzania, the Tanzania Investment Centre (TIC) announced that the country's cement deficit surpassed 1Mt since 2011.
As has happened elsewhere in Africa, notably in Nigeria and South Africa, local producers are pushing hard to restrict foreign imports as they grow their own capacity. In September 2012 the East Africa Cement Producers Association (EACPA) made warnings on the issue. The chairman of EACPA at the time was none other than the managing director of the EAPCC. In addition potential investors should take note that Kenya will hold its next general election in March 2013. Over 1000 people died in the protests following the 2007 election as well as the displacement of over 500,000 people.
Given this growth in protectionism, international producers who want to expand are being forced to seek riskier territories. Pakistan's Lucky Cement, a major importer of cement to Africa, is doing exactly this. It announced this week that it is entering into joint ventures in plants in DR Congo and Iraq. However these projects perform, Lucky Cement must be praying that they don't end up looking like the last year that EAPCC has endured.
Kenya: ARM Cement (formerly known as Athi River Mining Ltd) has posted a net profit of US$9.71m for the first nine months of 2012. This marks a 328% growth in profit compared to same period in 2011 when it made US$2.26m. ARM's turnover has climbed by 29% to US$90.7m, driven primarily by higher sales of its Rhino Cement brand.
ARM Cement Ltd received US$50m from the African Finance Corporation (AFC) to partly fund a plant in Tanzania as well as expansion efforts into the region. Rhino Cement, which is ARM's flagship brand, was launched in Tanzania in October 2012.
"(The Tanzanian launch) will contribute to the group revenues in the fourth quarter of 2012," said the company in a statement. The statement further explained that construction at a 1.2Mt/yr clinker plant in Tanga is progressing to schedule. ARMs' overall outlook remains optimistic for the immediate future with expectations of growth in demand for Rhino Cement and other products.
Meanwhile, Standard Investment Bank (SIB) has announced that, since 2007, the cement industry players in east Africa have invested over US$500m into capacity expansion projects in the region. This investment has seen cement grinding capacity in the region increase by 65.8% over the same period to 10.4Mt/yr, a figure that SIB expects to further increase by 41.8% to 14.76Mt/yr by 2015.
Between 2001 and 2010 total cement traded across the East African Community jumped from 0.45Mt/yr to 2.18Mt/yr. Kenya remains the region's largest net exporter with 0.61Mt in 2010, up from 0.23Mt in 2002. Rwanda is the largest net importer with 0.21Mt in 2010.
Tanzania: Tanga Cement, Tanzania's second-largest cement maker, has reported that its full-year profit in 2011 fell by 31% to US$13.8m due to higher production costs. Its revenue rose by 8% to US$101m in the same period. However, Tanga Cement has also announced plans to invest US$165m into a plant upgrade in order to boost output and exports. FLSmidth has confirmed that it is currently in negotiation to supply the upgrade.
Tanga Cement, which trades as Simba Cement, said it planned to increase exports to member states of the East African Community (EAC) trade bloc, and would build a second kiln, to be commissioned in the first quarter of 2015. Once completed, the second kiln will increase the company's clinker production capacity by 0.6Mt/yr, more than doubling the current capacity. The new kiln will increase the production capacity of clinker from 0.5Mt/yr to 0.6Mt/yr. Simba Cement increased its cement production capacity in 2010 from 0.75Mt/yr to 1.2Mt/yr after commissioning a second cement mill.