TPCC profit constrained by power issues, Tanzania

Tanzania Portland Cement Company Limited (TPCC) net profit rose slightly less than expected due to erratic power supplies but says the demand outlook is positive as it prepares to bring new capacity on-stream in the next quarter.

Net profit rose by 0.4 per cent to TZS50.61bn in 2011. “Higher imports of clinker and frequent breakdown of machinery resulting from erratic power supply,” company chairman Jean-Marc Junon said in a statement on Thursday.

Aside from these challenges, the company has been negatively impacted by imports into the region as the EAC member states decided for the fourth time not to reinstate cement import duties in the Common External Tariff.

TPCC said the construction sector grew moderately at around 3%, again attributed to inconsistent power supplies. However, he said the outlook is positive and cement demand will continue to grow. "(Construction of) infrastructure, residential and commercial projects will continue to fuel the growth especially with improved power supply," Mr Junon said.

The modernisation and upgrading of cement kiln 3 should increase clinker capacity at TPCC by 250,000tpa from the second quarter of 2012.