Tanga Cement Company has announced suspension of further expansion projects in reaction to what it termed as unpredictable policies aimed at protecting local industries. According to Mr Fluhmann, the managing director of the company which last year commissioned a new cement mill and packing unit that led to increased cement production of up to 1.25Mta, removal of the suspended duties on cement has resulted in dumping of subsidised cement, mainly from Pakistan, into the local market.
Mr Fluhmann explained last week that removal of suspended duties on cement resulted in increased importation of cheap cement which has flooded the local market. He noted for instance that last year some 250,000t of cement were imported, an equivalent of 12 per cent of the market share.
He appealed on the government to check the importation of subsidised cement to avoid hurting local industries. “Volumes and margins would be further affected by the imports and it would depend very much on the policy makers to determine the extent to which the local cement-manufacturing sector would grow,” he added.
On the company’s general performance, he said despite the global crisis, Tanzania experienced strong growth in the construction sector in 2009 and the trend was projected to continue improving, especially during this election year.
“The cement demand in and around Dar es Salaam grew substantially, but the core market consumption of cement in the northern region of Tanzania shrunk by three percent. As a result, our net sales revenue was kept constant, at par with 2008, with operational profits going up by five per cent,” he said.
With the establishment of a modern plant, the company was hoping to improve its production albeit subject to availability of reliable power, explained Mr Fluhmann.