Tanzania Portland optimistic on 2H turnaround

Tanzania Portland Cement Company expects a recovery in second half net profit thanks to reduced production costs.

In the first six months of the year, net profit fell by over one-third to TZS19bn (US$11.8m) due to unregulated imports,  power shortages and problems with its electric transformer, the HeidelbergCement group company had previously said.

However, TPCC managing director, Pascal Lesoinne that problems with the electric transformer (which had cut the number of operational mills from five to three), are expected to be rectified shortly, helping to bring down production costs. This [transformer installation] will reduce the costs incurred to run the generators," Mr Lesoinne told local press, expressing optimism that the second half will be better than the first.

Mr Lesoinne also welcomed the government’s recent announcement that it will study the problems that cement manufacturers face. The move comes on the back of calls from the domestic cement industry to reintroduce the import levy on cement as producers struggle to compete. 

Speaking at a TPCC product launch last week, Dr Abdallah Kigoda, Minister of Industry and Trade, said: “We cannot stop the importation of cement from abroad, but we can improve the quality of our cement and the methods we use to produce.” The committee will include members from the Ministry of Finance, the Ministry of Industry and Trade and the Tanzania Revenue Authority (TRA).

The Minister confirmed that the government is committed to improving the reliability of power and availability of transport infrastructure but noted:  “Our goal is to see the cement industry grow competitively to support the growth of the construction sector.”