Tanga Cement price comment, Tanzania

Tanga Cement's managing director Erik Westerberg has said that is poor and unreliable rail transport is causing an escalation in cement prices in the country.

“We are relying on road transport to move our products which is very costly,” Mr Westerberg told East African Business Week during the cement producers AGM last week. “If we were to use rail transport it would reduce the costs of production thereby reduce the final prices," he said.

He added that, if the rail transport was reliable, there would be an assurance that the prices of cement in the country which is currently sold at $9.61 a bag could drop further.

"There is unreliable rail transport in the country. The increase in the costs of our products is partly due to poor infrastructure," Westerberg said.

He also noted that there is an urgent need for the Tanzanian government to level the playing field for both local and foreign companies.

"We usually pay a lot of taxes which the government reinstated in 2005 while at the same time, we face an acute shortage of power where about 30% of the total electricity required to run the company depends on the company's own production. Partly, this are some of the reasons for the high cement prices," Westerberg said.

Last week the company said it would build a second kiln to be commissioned in the first quarter of 2015.