Local cement manufacturers say they are not scared with the ongoing construction of a new factory in Mtwara Region, which is expected to start production in August, this year.
Nigeria’s Dangote is building a $500-million factory, an annual capacity of 3 million tonnes, in a move that will double Tanzania’s annual output of cement to 6 million tonnes.
“Obviously Dangote will bring in more competition in the market. We know and respect the firm as a responsible player,” Tanga Cement Plc Chairman of the Board of Directors, Mr Lawrence Masha, told a news conference in Dar es Salaam at the weekend.
Mr Masha who was speaking on the sidelines of Tanga Cement Annual General Meeting (AGM), said Tanzanian manufacturers should always expect changes in the market and face the challenges.
“We can only manage to produce 1.5 milllion tonnes of cement annually and expect others to make up for the rest of the demand which is ever growing,” he said.
He said what matters most was the firm to maintain the best quality of its product and satisfy the ever changing customers’ requirements. Tanga Cement Plc Managing Director, Mr Reihnhardt Swart, also said that the arrival of Dangote has not sent the firm’s management panicking.
He said the challenge was to maintain profitability through cost-effective operations and optimum use of resources. He pointed out that the cost of electricity was currently a major problem and the firm was drawing up strategies for optional sources.
Mr Swart said availability of natural gas to cement manufacturers in the country in the near future would a be a big boost. Tanzania recently made big natural gas discoveries totalling more than 53 trillion cubic feet and coal reserves of up to 5 billion tonnes, but lacks infrastructure to deliver the energy to major factories.
Other cement producers in the country include Tanzania Portland Cement, owned by a subsidiary of Germany’s Heidelberg Cement AG and Mbeya Cement, owned by France’s Lafarge SA.
Mr Masha told the AGM that despite many challenges Tanga Cement had a good year in 2014, although operating profit was 16 per cent below the level reached in 2013. “This performance can be attributed to increased direct sales and active initiatives to control and reduce costs,” he said.
He said the firm’s future outlook was bright, although the year 2015/2016 would remain challenging. “We expect to continue to deliver satisfactory results,” he noted.
He said there were a number of projects that have been approved by the government and private investors to provide exciting opportunities.
He listed them as development of Kawe City, Tanzanite Mall and Tanzania China Logistics Centre in Dar es Salaam, as well as the ongoing expansion of the Dar es Salaam Port.
No comments:
Post a Comment