MUMBAI: Banco Products (India), manufacturer of gaskets and radiators, will invest 300 crore to set up its maiden cement plant in Tanzania to cater to the east-African markets. The company will chip in with `100 crore as its equity contribution for the project which will produce 0.5 million tonne of cement a year. The remaining `200 crore will be funded by bank loans, Vimal K Patel, chairman, Banco Products said.
Tanzania-based Lake Cement, in which Banco acquired a 51% stake last month, will be the investment vehicle for the greenfield project. The JV has acquired 70 hectares of land, having limestone deposits, and it will import coal from South Africa. The land acquisition and other necessary government clearances have been procured.
The Tanzania market, estimated to be at 2.7 million tonne, is dominated by Holcim, Heidelberg and Lafarge. With a compound growth rate of 8% in Tanzania and 6.5% in the neighbouring countries, the demand for cement is expected to go up to 4.45 mt by 2016, said an analyst with a domestic brokerage.
The neighbouring countries of Rwanda and Burundi are land-locked and have no cement producing facilities. These markets will have easier geographical and commercial access from Tanzania under the recently introduced East-African Community’s Free Trade Regime, the analyst added. Banco has plants in India and manufacturing subsidiaries in Europe. Its customers include Maruti, Tata Motors, Hero Honda, TVS Group and Ashok Leyland
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