How do you assess the business and investment environment in the country in 2011?  

In principle 2011 was a very volatile year with power shortages, high depreciation of the Shilling, and a very high inflation, specifically in the last half of the year. This had a negative impact on the general business climate in Tanzania and may very well have made prospective investors a bit uneasy. 

Our manufacturing processes are very energy intensive and constitute between 45 per cent and 50 per cent of our total production cost. Power shortages as well as the poor quality of electricity have been a major problem as electricity, to a large extent, had to be generated by our own generation at a much higher cost.

Depreciation of Tanzania Shilling also had a negative impact as certain raw materials, spare parts and fuel is being bought using foreign currency while we mainly are selling our products in the local currency.

Another challenge was poor infrastructure. We were in a situation that we had to transport cement, a bulky product, by road instead of railway.

This caused our distribution cost to increase. The longer the product has to be transported the higher the costs. Up country more than 60 per cent of the local price of cement is actually transport cost.

In order to improve the situation the government has to implement long-term, sustainable policies and show “hand-on” actions in order to create a fair business environment. The policies should also be clearly communicated and followed to ensure continued development and investment for the future

What plans do you have for this year? Any new investments?
At Tanga Cement we have advanced plans to increase our production capacity.

However, considering the challenges we experienced in 2011 this will depend on policies, actions and political will from the establishment to help create a fair business environment.

From the government we need a commitment to long-term policies, clearly communicated, implemented and followed in order to ensure a good business environment without unnecessary red tape and corruption.

What should your customers expect from Tanga cement this year?
 A high quality product distributed throughout the country - and beyond – contributing to the continued development in Tanzania, and at the same time giving a good return to our more than 12,000 share holders.

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