Tanga Cement Company, says its future expansion will be expensive because of the extended power rationing and growing competition from imports from Uganda and Kenya.
The cement manufacturer is also undertaking a study to install its own source of power in the wake of frequent power blackouts that are affecting its operations.
The company chairman Dave King, said, "We are directly affected by the quality and quantity of power supplied and by our own power generation to supplement Tanesco’s supply."
He said the unreliable railway services had also affected the company’s supply chain, especially to the mining Lake Zone area, which has recently seen a boom in construction as huge investments are made on the gold mining sector.
Tanga Cement said it cannot effectively service this market because of logistical problems. "We are already feeling the effect of this in the Lake Zone where we are seeing increased importation of cement from Uganda and Kenya," said Mr King.
Speaking just over a week ago, Mr King expressed optimism that the company will continue with its modernisation programme.
Tanga Cement produced almost 350,000t of cement in the first six months of this year. Mr King said turnover increased by 19 per cent while sales stagnated at four per cent increase. However, its capacity expansion will have to seriously consider the transport network and supply. Mr King said the company was in the final stages of acquiring its own locomotives to stop reliance on the public railway transport in the Lake Zone area.
He was he was restating a position the company announced last May when he said the company’s transport problems would soon be over. It had placed an order for locomotives from Spoornert of South Africa. Nevertheless, he was still assessing the impact of the recent privatisation of the Tanzania Railways Corporation.
The large-scale mines are the major consumers of cement from Tanga Cement.
According to Tanga Cement managing director Jurg Fluhmann, sales of cement in the Lake Zone have dropped from between 12,000 and 14,000t a month in the recent past to a mere 3,000 tonnes.