Tanzania's cement production is expected to grow by 18% by the end of this year, well above the region rate of 13%, an Equity Research Cement Sector survey said.
The current cement production in Tanzania is estimated at 3 million tons per annum against a demand of 2.2 million tons as against Kenya's annual production of 2.2 million tons.
The major producer is the Tanzania Portland Cement in Dar es Salaam with production capacity of 1.4 million tons, followed by Tanga cement with 1.25 million tons annual capacity. And the Mbeya cement plant has an installed capacity of 350,000 tons.
Tanzania Securities, a stock brokerage firm that conducted the research, backed the compounded annual growth rate (CAGR) by retail and business sector, infrastructure and mining sector share of market of 60 %, 20 % and 20 % respectively.
The company's Chief Executive Officer, Mr Moremi Marwa said the findings are good news to potential investors who should buy stocks of cement companies due to "economic momentum quickly returning to pre-global financial crisis."
"We expect the demand to grow at 18 % if the retail business, infrastructure development and mining investments are sustained," said Mr. Marwa last week.
The research, a guideline to investors, has analysed the sector in the past five years and also looked at industry activities for the next three years.
The construction and housing sector which have compounded the annual growth rate of about 10 % is the main drive of cement consumption, thus pushing up demand of the commodity.
Officiating, the construction of the Maweni Limistone Limited, a subsidiary of Kenya's Athi River Mining (ARM), president Jakaya Kikwete said cement production plays a crucial role in the development of the Tanzania construction sector.
According to President Kikwete, the contribution of the Tanzania construction sector to the overall GDP of the country rose from 5.1 % in 2001 to 6.5 % in 2007.
President Kikwete said, these statistics indicate that the Tanzania construction sector will continue to grow and to contribute more to the economic growth of the country. The demand for cement in the East Africa region is anticipated to grow at a rate of approximately 5-6 % in the next few years, which is twice the rate of projected economic growth, said president Kikwete.
With an expected production capacity of approximately 4,000 tons of cement per day and 1.5 million tons of cement per year, the new Tanzania cement plant will be the largest of its kind in the Eastern African zone and will be capable of addressing some of the growing demand for cement in the region, he added.
President Kikwete has applauded the Kenya-based company for being the first private company to build a cement factory in Tanzania.
After the construction of the new US$120 million ARM cement plant is completed, Tanzania will be the only country in the region to with four cement plants. Currently, cement plants include Mbeya Cement, Tanga Cement and Tanzania Portland Cement.
President Kikwete has said that, with the addition of this fourth plant, Tanzania cement production will double, to reach 3 million tons per year, which will allow Tanzania to begin selling their product to neighboring countries, where the demand for cement has also increased.
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