Displaying items by tag: Twiga

Tanzania: Twiga Cement’s sales were US$194m in 2021, up by 14% year-on-year from US$170m in 2020. The subsidiary of HeidelbergCement recorded a profit for the year of US$38.1m, up by 18% from US$32.2m. During the year, the company recorded its highest ever cement and clinker production and sales volumes.

Interesting move from HeidelbergCement this week with the news that it has agreed to buy a cement plant in Tanzania. The Germany-based multinational producer has signed a deal to buy a 68% stake in Tanga Cement from South Africa-based AfriSam. There has been no indication of the price but the arrangement will give HeidelbergCement a 1.3Mt/yr integrated plant in the north of the country along with a limestone quarry with reserves to last 30 years. The transaction is expected to close in the second quarter of 2022. HeidelbergCement says it then hopes to buy the remaining shares in the company.

HeidelbergCement already operates one integrated plant in Tanzania, Tanzania Portland Cement’s (TPC) Wazo Hill Plant in the capital Dar es Salaam. It took control of the plant in the early 2000s when its subsidiary Scancem International purchased over half of the company’s shares. The plant commissioned a new cement mill in 2014 to increase its production capacity to 2Mt/yr. Local press reported in April 2021 that the subsidiary planned to invest US$15m towards modernising the unit in 2021. It sells cement under the Twiga brand.

Tanga Cement runs a plant near Tanga that was originally commissioned in 1980. Holcim took it over in the mid-1990s before South-Africa based AfriSam assumed control in the early 2010s. The plant commissioned a second production line in 2016 and it has a production capacity of 1.3Mt/yr. It sells cement under the Simba brand.

HeidelbergCement’s decision to buy a plant in Tanzania is noteworthy because it goes against the general trend in acquisitions by western-based multinational cement companies in recent years. Instead of shrinking away from markets in developing economies and doubling-down on ‘safe havens’ in mature markets it has bought a plant in a developing country. Although one might argue that it does fit the definition of a well-chosen bolt-on acquisition.

Graph 1: Cement production in Tanzania, 2011 – 2020. Source: Tanzania National Bureau of Statistics.

As Graph 1 above shows, cement production in Tanzania has more than doubled over the last decade, from 2.4Mt in 2011 to 6.5Mt in 2020. Tanzania Portland Cement estimated local demand at 5.9Mt, including exports, in 2020. This was against a total cement production capacity, from both integrated and grinding plants, of 11Mt/yr. As well as the TPC and Tanga Cement plants mentioned above, Holcim runs an integrated plant in Mbeya and Huaxin Cement operates one near Tanga. Alongside this, new integrated plants have opened including Lake Cement’s 0.5Mt/yr Kimbiji plant in 2014 and Dangote Cement’s 3Mt/yr Mtwara plant in 2015. The big project on the horizon is a proposed 7Mt/yr integrated plant from China-based CNBM/Sinoma, although not much has been heard publicly about it since mid-2020. At that time local press was reporting that compensation was being finalised for residents of the proposed site near Tanga. Needless to say, given the size of the plant compared to the Tanzanian cement market, much of the plant’s output is intended for export.

With the CNBM plant in mind, it is noteworthy that HeidelbergCement committed to buying an extra plant in the country. Production has been going up over the last decade to presumably meet demand but the new Chinese project could potentially blot out the entire existing production. Tanzania faced a cement shortage at the end of 2020 despite coronavirus. TPC has repeatedly warned of production overcapacity in Tanzania and the challenges of competition. Yet it reported a new sales record in 2020 and growth of 7% in the national cement market. Despite a 5Mt overcapacity, TPC says it managed to adapt to the new market conditions. It also managed to grow its operating profit by 20% year-on-year to around US$46m in 2020 compared to HeidelbergCement Group’s 8% rise in results from current operations in 2020. This kind of return no doubt helped HeidelbergCement to make up its mind.

Tanzania: Turkey-based DAL Engineering Group has reported the successful delivery of three kiln shells to Germany-based HeidelbergCement subsidiary Tanzania Portland Cement’s integrated Wazo Hill cement plant near Dar Es Salaam. Tanzania Portland Cement produces the Twiga brand of cement across the 2.0Mt/yr plant’s three dry lines.

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: Tanzania Portland Cement Company Limited (TPCC) has recently conducted a training seminar for 250 cement distributors and block makers from Dar es Salaam to improve efficiency. The training was aimed at strengthening safety at work, improving the quality of blocks produced and enhancing efficiency in the production process to meet the growing market demand in the country, according to East African Business Week.

"Twiga Cement will continue to conduct similar trainings for block makers throughout the country. This is part of our effort to create awareness in the industry," said TPCC's commercial director, Simon Delens. He said that construction continues to grow with an increasing demand for blocks. "This is part of the firm's contribution to our local employment market. We have been a part of it for 46 years now as we want to build a strong nation," said Delens.

Tanzania: Tanzania Portland Cement Company's (Twiga) net profit grew by almost 50% in 2014 thanks to its strengthened brand image through quality and service delivery to the market.

Twiga announced a profit increase of 47.3% to US$29.8m for 2014, up from US$20.2m in 2013. Twiga Cement chairman Jean-Marc Junon said that the country's 7% GDP growth in 2014 helped to boost cement consumption significantly. "The increase in revenue, coupled with efficient cost management, resulted in an increase in operating profit of 55% to US$41m compared to 2013," said Junon.

Twiga recorded a 15% increase in sales volumes as a result of a better production efficiency, the commissioning of a new cement mill in the last quarter and the re-introduction of Twiga Extra in the company's product mix. Junon said that cement industry prospects are positive as consumption in the country and the East African block had continued to grow over the last few years. "Having an expanded capacity, Twiga is well placed to meet this growing demand," said Junon.

Tanzania: The National Environment Management Council (NEMC) has indefinitely closed down Tanzania Portland Cement Company (TPCC, Twiga) over environmental pollution.

NEMC senior legal officer Heche Suguta said that the plant was also required to pay US$26,944 in penalties. He said that the NEMC had established that the plant was discharging a huge amount of dust, which was bad for the environment and the people surrounding the plant. "We have several times asked the plant management to work out this shortcoming, but they have not taken any steps to mitigate the problem," said Suguta.

Twiga manufactures almost half of the cement produced by the three major plants in the county and its closure is likely to spark the fear of a sharp rise in cement prices. According to 2013 statistics, Twiga produces 1.4Mt/yr of cement out of the 3Mt/yr the country can produce. The remaining 1.6Mt/yr is shared among Mbeya Cement Company and Tanga Cement Company.

Suguta said that, previously, Twiga had four chimneys to emit pollutants, but three broke down and the plant was using only one out-dated chimney, which was overwhelmed. "The plant will be allowed to resume operations only after sorting out the problem by controlling dust," said Suguta. He said that the NEMC had been receiving complaints from residents surrounding the area that the dust from the plant was causing headaches and respiratory problems. "If they disobey this order, we will arrest their managing director and other stern legal action would follow."

Twiga's managing director and area manager for East Africa, Alfonso Rodriguez, said that the dust was coming from an old plant after the filter of the new plant got a technical fault. He said that they had ordered a new filter, which might take a month to arrive in the country.

Tanzania: The Tanzanian Portland Cement Company (Twiga Cement) has donated food valued at US$18,700 to four orphanages. The food is intended to feed orphans at the Kurasini, Malaika, Umra and Mamalenga orphanages, all in Dar es Salaam, for three months.

The Director of Human Resources Management for Twiga Cement, Jayne Nyimbo, said that it has become a tradition for the company to give donations at the end of each year. Around 300 orphans were gathered at a special festive meal, where they had the opportunity to play with 'Father Christmas' and have lunch with Twiga cement staff at the WAMA and Rotary Club of Dar es Salaam.

"We have brought children together to give them a day of pleasure, knowing that they do not have parents to spend time with, so we thought the least we could do is give them a Christmas donation that they deserve," said Nyimbo.

Tanzania: The Tanzanian government has rejected calls by local cement companies to place trade barriers on imported cement because local production is still insufficient. Tanzania's Minister for Industry, Trade and Marketing, Dr Abdallah Kigoda said that despite the expected progress from cement industries, the government will still allow cement imports until local producers meet domestic demand.

Kigoda admitted that although imported cement is sold at a lower price compared to locally-produced cement, it should stand as an 'eye opener' for local industries to become competitive. Tanzania has three cement factories: Tanga Cement, Mbeya Cement and Twiga Cement. Another four plants are under construction. The country's cement production capacity stands at 3.25Mt/yr with actual demand placed at 4Mt/yr.

"In order to control importation of more cement local factories had to increase production to meet the demand as the country was surrounded by potential market opportunities such as Southern Africa Development Community (SADC) and the East Africa Community (EAC)," said Kigoda. He also mentioned other challenges facing the domestic cement industry such as a unreliable power sources and high distribution costs caused by poor infrastructure.