Tanga Cement Company posted a Sh30 billion profit after tax last year.
“Despite facing many challenges we made a net profit after tax of Sh 30 billion which was the same as in 2008” board Chairman Charles Naude told the company’s 16th annual general meeting in Dar es Salaam at the weekend.
The board has recommended a dividend of Sh 179 per share to be paid at the end of this month. The Sh 11.4 billion to be paid to shareholders is 50 per cent more than what was given in 2008.
“The company faces many challenges in 2009 due to a stress on the market as subsidized cement from Pakistan flooded the market after the government removed suspended duty of cement” Managing Director Juerg Fluehmann said.
Poor power supply from the Tanzania Electric Supply Company meant that the company had to rely on backup generators which are expensive. Three were about 50 power interruption each month in 2009.
Poor railway transport from Tanga to the Lake Zone made the transportation of cement more expensive.
With the influx of cheap cement imports from India, China and Pakistan into the East African Community member states, Tanga Cement has shelved its project expansion.
In November last year, the company commissioned a Sh 50 billion plant to increase the production capacity to 1.25 million tones a year.
“The volume in the first four months of 2010 grew by seven per cent…. The growing number of construction activities gives us a very positive outlook of the coming months. But a number of things will depend on the government’s policy decision” said Mr. Fluehmann.
However, the company has indefinitely shelved its $250 million project of generating electricity due to uncertainties in the market.
Mr. Fluehmann said it was impossible for local cement producers to compete with their Asian counterparts since the latter’s production costs were three times lower than those of EAC.
“We’re not asking for protection. We are only asking for a level paying ground.” He said.