Even though plummeting revenues and skyrocketing costs of production typified the Tanzanian cement industry during the first six months of this year, cement manufacturers remain optimistic of good business during the second half.
"The cement market is expected to grow further in the second half of 2010. Increased capacity, resulting from recent capital expenditure will place (our) company in a position to take advantage of the expected growth," says Tanga Cement Company Limited (TCC) Board Chairman Charles Naude.
The Tanga-based cement manufacturer generated 61bn/- in sale revenues, an eight per cent increase from last year’s 56.4bn/-, according to the company’s published financial statements. But, he has decried indiscriminate cement imports and stiff market competition, saying they have had negative impact on cement prices.
"Although sales volumes increased by 16 per cent, revenues rose by only eight per cent," Mr Naude notes with a concern. The company, trading on the Dar es Salaam Stock Exchange (DSE) as Simba, also saw its cost of sales rising due to what he describes as, "higher maintenance costs and the use of expensive imported clinker during the maintenance shutdown in March and April 2010."
High production costs ate a large portion of sale revenues, resulting into decreased net profit- the company’s six-month net income dropped to 10.2bn/- from last year’s 12.8bn/-. Business was equally tough for Dar es Salaam’s Tanzania Portland Cement Company Limited (TPCC), the leading industry player whose production capacity stands at 1.4 million tones per year and is reported to be controlling about 45 per cent share of the local market.