Tanga Cement eyes efficiency in new strategy
Tanga Cement board chairman Lau Masha (right) addresses the firm’s annual general meeting in Dar es Salaam at the weekend. With him is the company’s managing director, Mr Reinhardt Swart. PHOTO | THE CITIZEN CORRESPONDENT
What you need to know:
- “Improving operational efficiency and containing production costs continues to be a major focus for the company…we have spent a lot of money in the last few years so as to ultimately reduce costs and become the most competitive cement producer in the region,” board chairman, Lau Masha told the firm’m annual general meeting in Dar es Salaam at the weekend.
Dar es Salaam. Tanga Cement, which trades as Simba, is employing a number of cost-cutting measures as it seeks to wade off the negative impact of competition on its overall performance.
“Improving operational efficiency and containing production costs continues to be a major focus for the company…we have spent a lot of money in the last few years so as to ultimately reduce costs and become the most competitive cement producer in the region,” board chairman, Lau Masha told the firm’m annual general meeting in Dar es Salaam at the weekend.
The Tanga-based cement manufacturer – which is also listed on the Dar es Salaam Stock Exchange (DSE) - saw its net profit dropping to Sh8.2 billion - at group level – in 2015 from as high as Sh28.4 billion in 2014, largely due to increased competition which affected its sales volumes.
“The 9.9 per cent decline in sales revenue was a result of competition from new entrants into the market which put downward pressure on sales prices and volumes,” Mr Masha said.
The company believed its performance was also affected by poor quality of electricity supplied by state-owned Tanzania Electric Supply Company (Tanesco) and last year’s depreciation of the local currency.
“We have now invested in a system that will ensure that we operate smoothly even during times of poor quality power supply….with this and many other investments that we have done during the past few months, we are very optimistic of our performance going forward,” said Mr Masha.
The government’s ongoing infrastructure development projects gives Simba Cement shareholders hope for a bright future.
Until 2011, Tanzania was home to three cement manufacturers. They included Dar es Salaam-based Tanzania Portland Cement which trades as Twiga, Simba and Mbeya Cement which has a market name of Tembo. However, three more manufacturers have started producing the product during the past four years. They include Athi Rivers Mining’s (ARM) Rhino cement and Dangote Cement. ARM has two factories – one at Mkuranga in the Coast Region and another one is in Tanga.
