India-based Banco Products is investing US$65m in its cement plant in Tanzania, which targets the East African market.
The investment follows Banco Products’ acquisitions of 51 per cent stake in the Tanzania’s Lake Cement Company Ltd.
Initially, the plant is expected to produce about 0.5Mta of cement.
Vimal Patel, chairman of Banco Products told The EastAfrican in Dar es Salaam that the Lake Cement Company had acquired 70ha of land, laden with limestone deposits, and would import coal from South Africa.
Tanzania has three other cement factories – Tanga Cement Company Ltd, Mbeya Cement Company Ltd and Twiga Cement Company – which have a capacity to produce about 2.97Mta following recent expansion projects aimed at meeting the regional demand.
Minister for Industry, Trade and Marketing Mary Nagu said that with a compound growth rate of eight per cent in Tanzania and 6.5 per cent in neighbouring countries, the demand for cement is expected to rise.
“We expect the region’s demand to grow to 4.45Mt by 2016,” said Ms Nagu.
Producers from the region have been facing stiff competition from cheaper imports from the Far East, forcing authorities to seek ways to counter the tide.
In a submission to the region’s governments, the East African Cement Producers Association said it members had spent over US$1bn on expanding capacity, which saw an increase in annual output from 6.4Mt two years ago to 10Mt.
In Uganda, Hima Cement is about to complete a new plant in Kasese that will increase its production capacity from 350,000t to 850,000t, while Tororo Cement recently announced that it will invest US$50m to double its capacity from 1Mta to 2.2Mta.