TANGA Cement marked a historic sale in a single year after it managed to sell over one million tonnes of cement last year, pushing up its net profit by 52 per cent.
The Tanga-based cement firm said the sales volume grew up by 21 per cent to 257.92bn/- as a result of export sales that rose by 55 per cent last year, with pre-tax profit increasing to 55.93bn/- from 37.08bn/-.
The Tanga Cement acting Chairman, Prof Samuel Wangwe, said the firm overcome the industry challenges - entry of new manufacturers and cheap imports - last year to achieve the milestone sales. “The sales volume increase marks a significant milestone for Simba Cement, being the first time the companysold over one million tonnes of cement in one year,” Prof Wangwe said in a statement in Dar es Salaam.
He said sales increment and reduction on maintenance costs was partlyresponsible for the 26 per cent increase in the company’s gross profit for the year. “The overhead costs were strictly controlled and the company’s operation profit for the year increased by 34 per cent,” Prof Wangwe said, adding that improved supply of electricity as compared to last year’s also contributed to the cement manufacturer’s profitability.
The costs also subdued following the fact that the firm used merely 1.91 per cent of own power generation compared to 6.9 per cent of 2011. However, the transport costs declined aa a result of 50 per cent reduction railway services available. “This substantially increased distribution costs as the company had to rely on road transport increased,” said the acting Chairman. Tanga Cement is listed on the Dar es Salaam Stock Exchange where it trades as Simba, with its
share price stagnating at 2,400/- since the beginning of this year.
The announced financial performance is likelyto push up the stock value. “The boards recommends a final dividend of 55/- per share, bringing to 100/- the accumulated dividend for the year compared to 86/- of 2011,” said Professor Wangwe.
The board of directors has approved the construction of the second clinker at the factory mid this year to increase output in the years ahead and meet demand, getting rid of imports. The project, scheduled to be completed in 2015, will increase clinker production capability by 600,000 tons per year, more than double the current capacity.
"This additional capacity is expected to satisfy the consistently high demand for cement from both the local and export markets," Prof Wangwe said.
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