Twiga to spend $100m to expand its Dar plant

Twiga to spend $100m to expand its Dar plant
19 May 2008

Tanzania Portland Cement Company Ltd (TPCC) is to invest US$100m in an expansion of its Dar es Salaam plant that will increase its capacity by 90 per cent.

Klaus Hvassing, the company’s managing director, told The East-African in Dar es Salaam last week that the firm will increase production capacity to more than 1.4 million tonnes annually by the second quarter of 2009, after the completion of a new kiln. The annual production capacity at the country’s leading cement producer is now between 720,000 and 750,000 tonnes. When completed fully in the second quarter of 2009, with a new kiln in full operation, we will be able to produce more than 1,400,000 metric tonnes annually, Mr Hvassing said. The cement firm first plans to launch a new grinding mill by August this year.

The company is listed on the Dar es Salaam Stock of Exchange where it trades as Twiga Cement. Twiga shares were selling at $0.142 last week. The firm’s capitalisation at the bourse is $255 million. The company manufactures two brands of cement — Twiga Cement Ordinary and Twiga Cement Extra.

The total installed clinker production capacity in Tanzania is about 1.2 million tonnes per year. While total clinker production in the country in 2004 was 1.06 million tonnes with a consumption of 1.22 million tonnes, production in 2005 rose to 1.39 million tonnes. TPCC decided to increase its capacity due to the high demand in Tanzania and other African Countries, especially South Africa, which is constructing modern stadiums for the coming World Cup. The price of cement has increased to over $16 per bag.

With this new investment, TPCC will strengthen its position as the leading cement company in Tanzania. The company is among the three leading cement producers in the country. According to Mr Hvassing, in order to meet the increasing cement demand, the company will invest more than $100 million to expand and modernise TPCC’s production facilities with environmentally friendly and state of the art technology by 2009. The investment will include the installation of a new kiln line, a cement-grinding mill and packing and loading facilities.

Cementia Holdings AG of Switzerland established TPCC in 1959. In 1962, Cementia Holdings AG in collaboration with Tanganyika Development Company (now Tanzania Development Corporation) started to build the cement factory at Wazo Hill in Dar es Salaam.

The government of Tanzania owned 20 per cent of the company’s shares. Construction of the factory was completed in mid 1966. In 1967, the government increased its shares from 20 per cent to 50 per cent and in 1973 the company was nationalised, with the government increasing its shares to 100 per cent. In 1992, the government entered into a joint venture with two foreign companies, Scancem International ANS, which owns 13 per cent and Swedfund International AB, which now owns 13 per cent. The government retained 74 per cent of the shares.

The company was privatised in 1998 with the Tanzania government retaining 39 per cent. In 2006, shares held by the government were sold to the public through the Dar es Salaam stock exchange. As a result, today Scancem International has 69.3 per cent of the shares while 30.7 per cent is held by the public.

Published under Cement News