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New Investors to Invest in Tanzania Cement Sector

New Investors to Invest in Tanzania Cement SectorPhoto by Daily News

By Katare Mbashiru

The cement market environment in Tanzania is significantly taking new turn.Tanzania will soon see her cement production capacity surging to over 17 million tonnes, thanks to three new companies that have requested to invest in the country's cement sector.

About 400km from Dar es Salaam – was commissioned in December 2015 and is the largest cement factory in Tanzania. With about 500 million tonnes of limestone reserves, enough for 149 years, the plant is capable of producing large amounts of high-quality 32.5 and 42.5 grade cements to meet local market needs at competitive prices, as well as surrounding export markets by sea.

With an estimated population of about 42 million, Tanzania’s per-capita cement consumption of around 50kg per annum is well below the global average and low even for Africa. Tanzania’s economy is expected to grow at an estimated 7.0% over the next five years, supported by the manufacturing, mining and tourism sectors. The improving performance of the economy has fueled strong growth in cement demand and the prospects remain favourable, given the linear relationship between economic growth and cement consumption.

The three companies plan to inject up to 20tri/- in production of cement in the next few years. Launching the Industrial Exhibitions at the Mwalimu Nyerere Trade Fair (DITF) grounds along Kilwa Road in Dar es Salaam yesterday, the Industry, Trade and Investment Minister, Mr Charles Mwijage, named the new entrants in the cement sector as EAM, Mamba and Sungura companies.

He said EAM Company has asked to have its three million tonnes cement plant in Tanga Region. "But the investors say they are capable of producing up to seven million tonnes should the government agree on their two conditions," said the minister.

"Their first condition is for the government to allow them to export their product ... my ministry has nodded to this condition," revealed the minister, noting, however, that he cannot reveal the second condition, which he said, "I have forwarded to my boss, the president."

The minister was optimistic that the government was serious in establishing an industrial economy, the reason it invites more investors in the country. Mr Mwijage further said that Mamba and Sungura companies have also expressed interest to invest in the country, hinting that negotiations between the government and the two prospective investors were on progress.

Other players already in the country's cement sector are Twiga, Simba, Tembo, Nyati and Carmel whose combined production capacity stands at 10.3 million tonnes, implying that the current manufacturers, which are not producing to their installed capacities, if combined with EAM's capacity of seven million tonnes, will reach over 17 million tonnes.

Mtwara-based Dangote Cement Company is another investor whose operations have been recently halted over alleged technical hitches. With three million tonnes, Dangote, according to the minister, has the highest production capacity in the country.

There are still uncertainties surrounding the Dangote Cement company over its current decision to suspend operations, with sources hinting that the investor was in a dispute with the government over operational costs.

However, the government has repeatedly insisted that it was not in conflict whatsoever with the Mtwara based cement manufacturer. Mr Mwijage said yesterday that the country has installed capacity of producing 10.3 million tonnes of cement, with only seven million tonnes capacity being utilised.

The country's highest cement demand, according to the minister, is 10.3 million tonnes.
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