Displaying items by tag: Tanzania

Kenya/Tanzania: The governments of Kenya and Tanzania are working together to resume exports of cement. A delegation of Tanzanian officials are due to inspect cement plants in Kenya to verify the source of the raw materials used in their manufacture, according to the East African newspaper. This could then lead to exports of cement from Kenya to Tanzania to be re-allowed.

The two countries recently held bilateral trade talks in Arusha on non-tariff barriers. They agreed to speed up the verification missions recommended for confirmation of product origin as provided for in the East African Community rules of origin. Tanzania blocked cement despatches from Kenya in 2018 due to the use of imported clinker.

Tanzania: Twiga Cement’s revenue rose by 30% year-on-year to US$151m in 2018 from US$116m in 2017. Its net profit grew by 60% to US$24.6m from US$15.4m. Its cement sales volumes increased by 9%. The subsidiary of Germany’s HeidelbergCement said that the local cement market saw continued growth in 2018 and that, despite production overcapacity, it maintained its ‘market leadership.’

Tanzania: Tanga Cement says it expects to reduce its losses by around 50% in 2018. It said that the local cement market improved notably in 2018 and that the cement producer improved its trading results and profitability, according to the Daily News newspaper. In 2017 the company reported a loss of US$11.5m due to local competition.

Nigeria: Domestic sales growth drove Dangote Cement’s financial results in 2018. Its local cement sales volumes grew by 11.4% year-on-year to 14.2Mt in 2019 from 12.7Mt in 2018. Sales in the rest of Africa remained stable at 9.4Mt. Sales revenue grew by 11.9% to US$1.71bn in Nigeria and by 9.6% to US$784m in the rest of Africa. Overall revenue grew by 11.9% to US$2.49bn from US$2.23bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 12.1% to US$1.20bn from US$1.07bn.

“This is a record financial performance by Dangote Cement, driven by a strong increase in our home market, Nigeria, despite heavy rains and uncertainties about the election,” said Joe Makoju, group chief executive officer. He added that, although Pan-African volumes were unchanged in 2018, he was confident that the group would see an increase in 2019, driven by higher volumes in Tanzania, Ethiopia, Congo and Sierra Leone. Elsewhere in Africa the cement producer said that plant shutdowns in Tanzania due to delays to a gas turbine installation, civil unrest in Ethiopia and a reduction of imports from Nigeria to Ghana had reduced its sales.

US: ZAG has reached a US$506,250 settlement with the US Department of the Treasury's Office of Foreign Assets Control (OFAC) over breaches on trade sanctions with Iran. Between mid-2014 and early 2015 OFAC says that ZAG purchased 263,563t of Iranian produced clinker via a company based in the UAE. The government body added that ZAG knew that the clinker came from Iran although it was assured at the time by the supplier that it was not subject to US sanctions. The clinker was then sold to a company in Tanzania. However, OFAC said that since ZAG voluntarily disclosed its violation of sanctions to the office it viewed the case as a so-called a ‘non-egregious case‘ and the resulting fine was far below the maximum.

Tanzania: The Tanzania Investment Centre (TIC) says construction of a new 7Mt/yr cement plant by China’s Sinoma and Hengya Cement is due to start soon. TIC executive director Geoffrey Mwambe said that the government body had provided all the necessary incentives for the US$1bn project, according to the Citizen newspaper. The TIC licence gives investors a three-year window in which to start construction, otherwise the licence revoked.

The Chinese company plans to build a cement plant with a 1200MW captive power plant. At least 70% of the cement produced at the plant will be exported and the remainder will be sold domestically. The unit is expected to create 4000 - 8000 direct and indirect jobs.

Kenya/Tanzania: The administrators of ARM Cement have written off loans worth around US$210m to Maweni Limestone, a subsidiary in Tanzania. The decision by the PricewaterhouseCoopers (PWC) administrators has significantly reduced the cement producer’s assets to US$140m from US$362m, according to the Business Daily newspaper. In a report PWC alleges that ARM Cement had treated its debt to Maweni Limestone as a performing loan, despite the fact that the subsidiary had repeatedly defaulted on it, effectively misleading investors as to the value of the company. The write-off has left ARM Cement’s creditors, including the UK government-backed CDC Group, in negative equity to a value of around US$24m.

Other irregularities that have been discovered amount to US$1.5m. These issues include alleged outstanding director pay, payments to mystery customers and a payment of US$0.4m for ‘fixtures and fittings.’

ARM Cement owns an integrated cement plant at Tanga and a grinding plant in Dar es Salaam that is currently not in operation. It is also building a grinding plant in Tanga that remains unfinished. The cement producer was placed into administration in late August 2018.

Nigeria: Domestic sales volumes of cement by Dangote Cement grew by 11.7% year-on-year to 10.8Mt in the first nine months of 2018, from 9.6Mt in the same period in 2017. However, sales in Sub-Saharan Africa grew slightly to 7Mt due to lower sales in Tanzania, disruptions due to civil unrest in Ethiopia and a reduction in exports from Nigeria to Ghana. This was mitigated by growing sales volumes in Zambia. Sierra Leone and the start-up of operations in the Republic of Congo. The cement company’s revenue rose by 13.5% to US$1.89bn from US$1.66bn and its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 14.6% to US$928m from US$810m.

“Nigerian sales were affected by serious flooding in September 2018 and although Pan-African sales were flat, we will see soon increased sales from Tanzania, now that its gas turbines are installed, and from Ethiopia as local community issues are resolved. We have launched new products in Nigeria that we believe will help us improve our leadership position in Africa’s most exciting market for cement,” said Joe Makoju, Group Chief Executive Officer (CEO).

Tanzania: Energy minister Medard Kalemani has inaugurated a new natural gas connection project to Dangote Cement’s plant at Mtwara. The project is being implemented to two phases with a new power plant planned that will generate up to 45MW, according to the Tanzanian Guardian newspaper. The upgrade will cost around US$875,000. Phase two of the project will see the construction of a 2.7km pipeline to the cement plant as well as supporting infrastructure. This is expected to be completed by the end of October 2018. Using natural gas is expected to significantly reduce the running costs of making the cement, which has been using diesel generators.

Tanzania: The State Mining Corporation (Stamico) has assured cement producers that it holds sufficient coal supplies. It said that 18,600t/month of coal is being produced every month at its mine at Kabuko in Songwe, according to the Citizen newspaper. It intends to increase production to 45,000t/month when demand is ‘high’ and then to later raise production to 60,000t/month when it fixes infrastructure bottlenecks.

In August 2018 cement producers reported that they faced coal shortages. Subsequently, cement prices rose.