Tanzania Portland Cement 1H net up 43%

Tanzania Portland Cement 1H net up 43%
Published: 05 September 2011

Tanzania Portland Cement, a unit of HeidelbergCement, said first-half net profit rose 43 per cent and forecast higher sales for the rest of 2011 thanks to a construction boom in east Africa’s second-largest economy and improved efficiency.

Tanzania’s biggest cement maker posted a net profit of TZS28.59bn (US$17.6m), up from TZS19.97bn a year ago.

"The net profit increased by 43 per cent, mainly due to increased volume coupled with better production efficiency," the company’s chairman, Jean-Marc Junon, said in a statement on Monday.

Tanzania Portland Cement (TPCC) posted revenue of TZS107bn in the first half of 2011, a 24 per cent increase on the same period last year, he said.

Junon said the firm planned to complete work on its main cement production line in the first quarter of next year.

The expansion project will enable the company to wean itself off imports of clinker, the main ingredient in cement making, by locally producing all its requirements.

"Imported clinker negatively impacted the costs of the first half of 2011. Such import was made necessary because of power outages and quality of electricity supply combined with subsequent production problems," he said.

"With a continued strong demand for cement coupled with our ability to produce the clinker locally, TPCC should further improve its performance in the second half of 2011," Junon said.

Tanzania increased infrastructure spending in its 2011/12 budget by 85 percent to TZS2.78trn.

The company, which is listed on the Dar es Salaam Stock Exchange and trades as Twiga Cement, raised cement prices by TZS13,000/t due to the depreciation of the local currency against the U.S. dollar.