Managing Director’s Statement 2018-08-21T11:35:01+00:00

Managing Director's Statement

It is with great pleasure that we present the financial performance for the year ended 31 December 2016.  Against this backdrop of various challenges and opportunities faced during the year under review, we made good progress. The implementation of our strategic actions is well advanced and our business model proved resilient and viable.

Our performance reflected results of enhanced competition in the market, due to planned government infrastructure projects that continues to attract new market entrants. However, industry’s engagement with Government yielded a sharp decrease in imported cement as the Government increased duties on cement and cement products.

Quality remains central in our business as proven by the recognition of Simba Cement as a Super Brand and the company’s ISO certifications. This extends to all areas of our business including financial reporting where Tanga Cement was once again recognised for excellence in financial reporting by the National Board of Auditors and Accountants.

Performance

Our top line experienced a twenty percent (20%) percent year on year drop, with sales revenues of Tanzania shillings One hundred sixty seven billion (Tzs 167bn) in FY2016 compared to Tanzania shillings Two hundred and nine billion (Tzs 209bn) in FY2015. Nevertheless, the company demonstrated its resilience and ability to remain operative and profitable despite the competition, by way of adoption of sustainable go to market strategies. The result was growth in profitability margins and increased operational efficiency while retaining our superior performance.

The commissioning of the second integrated kiln and manufacturing line, Tanga Kiln Two (TK2) was among our key achievements. TK2 was a two-year construction project at an investment of One hundred fifty million USD ($150 million), in line with the budget and within the scheduled timeframe. The new production line more than doubled our clinker and cement capacity to one million two hundred fifty tons per annum (1.25million t/yr) making Tanga Cement self-sufficient in clinker in the long term and providing an avenue for additional revenue from sale of excess clinker.  TK2 will position Tanga Cement to meet the anticipated increase in future cement demand and improve the production efficiencies through this new modern production systems.

The operational efficiencies introduced by the new integrated production line, contributed to the decrease in our cost of sales to One hundred twelve point five billion Tanzania shillings Tzs112.5bn, a thirty point nine percent (30.9%) decrease from One hundred sixty two billion Tanzania shillings Tzs162bn in the previous year. We optimised our logistics by decreasing third party road transportation and increasing use of rail transport to major towns, taking advantage of our direct access to the rail line into our packing and loading bay. Our agreement with Tanzania Railway Ltd (TRL) also allowed us to utilise more of their wagons dedicated to Tanga Cement PLC as well as rail depots as central distribution points, reducing our storage and transportation costs further and consequently boosting rail transport and distribution in Tanzania.

Ensuring Sustainable Growth

We recognise that market dynamics keep changing; we are adopting our strategies to suit market dynamics while remaining cognisant of our core business and our responsibility to all our stakeholders.

We will continue with the implementation of our cost optimisation programme as well as enforcing additional efficiency measures in production and operations while retaining our brand reputation of being the highest quality product.

In line with our strategic growth plans we will be increasing our cement production capacity with a grinding plant in the Northern region to take advantage of the growing cement demand along the northern corridor of Tanzania.

Outlook

We continue to seek out new opportunities and innovate on our production efficiency, product offering and distribution solutions to supply our products to upcoming infrastructure projects.

2017 is poised to provide exciting opportunities from geopolitical developments and increased competition.

Despite the initial delay by government in the roll-out of these projects, we remain optimistic that they will pick up in the near future as indicated by government.

The anticipated large infrastructure projects such as the oil export pipeline from Uganda through Tanga in Tanzania, the Standard Gauge Railway (SGR), Dar es Salaam and Tanga port upgrades, and an ultra-modern sports stadium in Dodoma, are anticipated to shore up the demand for cement in Tanzania over the next five years.

 

Reinhardt Swart

Managing Director

 

  

Ni kwa furaha kubwa tunawasilisha taarifa ya utendaji kwa mwaka ulioishia tarehe 31 Disemba 2016. Kutokana na changamoto mbalimbali pamoja na fursa tulizokutana nazo katika kipindi cha mwaka husika, tumepiga hatua.  Utelekelezaji wa mikakati yetu imeendelea vizuri na muundo wetu wa biashara umeimarika na kutekelezeka.

Utendaji wetu umeakisi matokeo ya ongezeko la ushindani katika soko, unaotokana na  mipango ya Serikali  ya miradi ya miundo mbinu ambayo imeendelea kuvutia washindani wapya sokoni. Hata hivyo, sekta kwa kushirikiana na Serikali imefanikiwa kupunguza kwa kasi uingizwaji wa simenti kwa Serikali kuongeza ushuru kwenye simenti na bidhaa zitokanazo na simenti.

Ubora ni muhimu sana katika biashara yetu kama inavyothibitishwa na kutambulika kwa simenti ya Simba kama chapa bora na vyeti vya ISO ambavyo kampuni ilivipata. Hii inaenea katika maeneo yetu yote ya kazi ikijumlishwa na upande wa taarifa zetu za fedha ambapo kwa mara nyingine Tanga Cement ilipata tuzo na utunzaji bora wa hesabu inayotambulika na bodi ya wahasibu na waaguzi.

Utendaji

Utendaji wetu ulishuka kwa asilimia ishirini (20%) kwa mwaka, ambapo mauzo yalikuwa shilingi za kitanzania bilioni mia moja sitini na saba (Tsh167 bili) kwa mwaka wa fedha 2016 ikilinganishwa na shilingi za Kitanzania bilioni mia mbili na tisa (Tsh209 bili) kwa mwaka wa fedha 2015.  Hata hivyo, kampuni ilionesha uimara na uwezo wa kuendelea na utendaji kwa faida licha ya ushindani, kwa njia ya mikakati endelevu kufuatana na hali ya soko ilivyo. Matokeo yalikuwa ni kukua kwa faida na kuongezeka kwa ufanisi katika utendaji wakati huo huo tukiendelea kulinda utendaji wetu ulio bora.

Uzinduzi wa tanuru ya pili (TK2), ilikuwa ni miongoni mwa mafanikio yetu makubwa.  Ujenzi wa tanuru ya pili ulikuwa ni mradi wa miaka miwili ukiwa ni uwekezaji wa dola za kimarekani milioni mia moja hamsini na mbili (US$152 mili), ukienda sambamba na bajeti na muda uliopangwa. Tanuru hili limeongeza kiwango chetu cha uzalishaji wa klinka na simenti na kufikia tani milioni moja laki mbili na hamsini (1.25 mili tani) kwa mwaka, na kuifanya Tanga Cement kujitosheleza katika uzalishaji wa klinka kwa muda mrefu na kutoa njia ya kuongeza mapato kutokana na mauzo ya klinka ya ziada.  Tanuru namba mbili (TK2) litaiwezesha Tanga Cement PLC kutimiza mahitaji yatakayo ongezeka hapo baadaye na kuboresha uzalishaji kupitia mfumo wa kisasa.

Kwa kuwa na utendaji wa kiufanisi wa tanuru mpya, gharama zetu za mauzo zilipungua na kuwa shilingi za kitanzania bilioni mia moja kumi na mbili nukta tano (Tsh112.5 bili), ikiwa ni pungufu kwa asilimia thelathini nukta tisa (30.9%) kutoka shilingi za kitanzania bilioni mia moja sitini na mbili (Tsh162 bili) kwa mwaka uliopita. Tumeboresha eneo letu la usambazaji kwa kupunguza watu wa kati katika usafirishaji wa barabara na kuongeza matumizi ya usafiri wa reli katika miji mikubwa, tukifaidika na ukaribu wetu na reli. Mkataba wetu na Tanzania Railway Ltd (TRL) pia ulituwezesha kutumia maghala yao kama vituo vyetu vya usambazaji, ikitupunguzia zaidi gharama za uhifadhi na usafirishaji na hivyo kuupa nguvu usafiri wa reli Tanzania

Kuhakikisha Ukuaji Endelevu

Tunatambua kwamba miendendo ya soko inaendelea kubadilika; tunapanga mikakati yetu kulingana na mabadiliko ya wakati huku tukiendelea kutambua misingi yetu ya biashara na wajibu wetu kwa wadau wetu.

Tutaendelea kutekeleza mpango wetu wa kupunguza gharama kwa kuongeza kiwango zaidi cha ufanisi kwenye uzalishaji na uendeshaji wakati tukiendelea kulinda hadhi ya chapa yetu kwenye ubora wa hali ya juu wa bidhaa zetu.  Pia tunapanga kuongeza kiwango cha uzalishaji kwa kuwekeza kwa kujenga kinu cha kusagia simenti eneo la kaskazini ili kupata faida ya eneo la kijografia na mahitaji ya eneo la kaskazini mwa Tanzania.

Mtazamo wa Mbele

Tutaendelea kutafuta fursa na kujiweka katika nafasi ya kusambaza bidhaa zetu sokoni kwenye miradi ijayo ya miundo mbinu.  Pamoja na ukimya katika utekelezaji wa miradi hii, bado tunayo matumaini kuwa miradi hiyo itatekelezeka siku za karibuni. Matarajio ya miradi mikubwa ya ujenzi wa miundo mbinu kama bomba la mafuta toka Uganda kwenda Tanga Tanzania, ujenzi wa reli ya kiwango cha kisasa, bandari za Dar es Salaam na Tanga, na uwanja wa kisasa mjini Dodoma, vinatarajiwa kuchochea mahitaji ya simenti nchini Tanzania katika kipindi cha miaka mitano ijayo.

 

Reinhardt Swart

Mkurugenzi Mtendaji