Tanzania is projected to become one of Africas top cement producers

Industry in Tanzania Tanzania is one of the poorest countries in the world. As of 2015, Tanzania'sgross domestic product(GDP) was an estimated $43.8 billion,or $86.4 billion on apurchasing power parity(PPP) basis.Tanzania is a middle-power country, with a per capita GDP of $1,813 (PPP)which was 32% below the average of $2,673 for the 45 sub-Saharan African countriesand ranked 23rd among those countries. Industry and construction is a major and growing component of the Tanzanian economy, contributing 22.2% of GDP in 2015.This component includes mining and quarrying, manufacturing, electricity and natural gas, water supply and construction.

Cement production in Tanzania

In terms of exports and job creation, cement production is becoming a truly important activity that contributes profoundly to Tanzanias economic growth. The cement industry has of late seen more key players coming in, the move that would lead to increased production to make the country the largest cement producer in Africa. Locally, the situation will stir up competitions that would force prices to decline, to benefit the local consumption thus becoming an important incentive in encouraging construction activities.

Mr Mizengo Pinda, the Prime Minister, declared in the 14th session of the National Assembly in Dodoma, that the cement industry has positive prospects to become the largest contributor of revenue to the government as well as job creation.He also asserts the current production capacity in the country is 3.8 million tonnes per annum, but it is expected to more than double to 8.3 million tonnes per annum in the near future. Domestic consumption is also projected to increase to 3.9 million tonnes per annum from 2.25 mtpa. The Premier added there are ongoing five cement mills construction projects in Arusha, Tanga, Lindi and Mtwara regions to make a total of nine cement projects which will makeTanzaniathe largest cement producer on the continent.To ensure that Tanzania exploits fully the huge potential in the cement industry, Premier Pinda said the government will act strongly in curbing importation of cheap cement which has been contributing to killing the local industries and deny the country revenue, he said.Also, it is projected that construction of residential and commercial housing will continue to dominate local cement demand at around 85 per cent in the medium term. Construction and housing sectors will continue per same projections to be the main driver of cement consumption in the country.source: www.housingfinanceafrica.org (http://www.housingfinanceafrica.org/wp-content/uploads/2016/01/cost-of-50kg-bag-of-cement.jpg)Available reports from the cement producers show that by this year, Tanzania is projected to become a net exporter of cement fully supported by projected strong demand from its (import dependent) neighbours countries of Burundi,Rwanda, and East DRC.

Major cement producers in TanzaniaUp to five years ago the country had three cement plants with a combined installed capacity of 4.65 million tonnes a year, but to date there are seven cement producers.The two giant manufacturers - Tanzania Portland Cement Company (Twiga Cement) and Tanga Cement Company (Simba Cement)- shares plunged at the time when a number of new firms set plants. DSE cement manufacturers share prices depreciated by between 6.0 and 11 per cent since the beginning of 2015. Twiga cement went down by 6.5 per cent to 3,740/- a share while Simba cement depreciated by 10.8 per cent to 3,780/. Both companies share trade at almost the same price. Twiga net profit for the first half of this year went down by 18 per cent 22.17bn/- due to raising operations pushed by deprecation of shilling against the US dollars.Twiga Cement Managing Director, Mr Alfonso Rodriguez, says the target capacity follows last year's commissioning of a new 700,000 tonnes production line. Simba Cement, on other hand, last year's net profit declined by 12 per cent of 28.4bn/- as a result of the once off impairment of goodwill and other market challenges."We experienced some set-backs in terms of overall equipment efficiencies (OEEs) due to some equipment failure during the year. Improving on OEEs will be a significant focus during 2015," Simba's Chairperson, Mr Lau Masha says.Dangote Cement has signed two agreements that will enable its US$600m cement plant in Tanzania to generate 150MW from coal. One agreement is with Tancoal. Dangote Cement has also signed a coal prospecting licence for a site in Mbinga. However, the plant will first run on diesel until it is able to generate its own electricity from coal.HeidelbergCements history in Africa began in the mid-1960s. These initial operations by the company Scancem International were soon expanded into the sub-Saharan region. In 1999 Scancem International became part of HeidelbergCement.

Source: http://www.heidelbergcement.com/en/africa

Though the industry is blossoming, at the same time, cheap imports from the Middle East countries have continued to enter Tanzanian markets. These cheap imports are creating unfair competition as they benefit from widespread acts of tax evasion through under declaration of prices and volumes delivered into local markets.