HeidelbergCement may review expansion plans, Tanzania

HeidelbergCement may review expansion plans, Tanzania
Published: 11 July 2011

HeidelbergCement’s Tanzanian unit said it may halt output and a US$60m expansion plan unless the government evicts people illegally occupying the premises of its Wazo Hill plant, Bloomberg reports.
Tanzania Portland Cement Co. will hold a board meeting next month to review its plans, Managing Director Pascal Lesoinne said in an e-mailed response to questions on July 6 in Dar es Salaam, the commercial capital. Twiga Cement, as the company is known, is considering boosting capacity at the factory to 2Mt from 1.4Mt, he said.

“We are still confident that the government of Tanzania will bring a quick and agreeable end to this ongoing issue, but we need to stress that if this would not be done timely and properly, we would have to halt the production and further investments,” Lesoinne said.

Twiga has a 45 per cent share of Tanzania’s cement market, according to Lesoinne, making it the biggest producer of the building material in East Africa’s second-largest economy. The company acquired the land where the plant is situated between the 1960s and 1993, when it bought out 200 villagers, according to a Court of Appeal judgement dated August 4, 2010. In 2000, “people started invading the area and built small huts,” according to the judgement, a copy of which was provided to Bloomberg by the company on July 8.

A Tanzanian court ruled in 2008 that the company is the owner of the land and ordered the government to relocate the squatters, the Dar es Salaam-based Guardian newspaper reported on June 21. Twiga officials met state officials last month to discuss implementation of the ruling and expects the government to take action “early next week,” Lasoinne said.
In addition to boosting capacity at Wazo Hill, the company is also considering building a new plant next year to be completed in 2013, Lasoinne said, without providing further details.