Tanga Cement (DSE:TCCL), one of Tanzania’s largest cement producers, recently released its unaudited results for the six months ended 30 June 2019, stressing that the company’s growth in business continued to be anchored on the growth in demand of the Tanzanian construction industry.
“Robust infrastructure investment and a strengthening consumer base remain major drivers of the business performance witnessed in the first six months supported by lower inflation levels,” the document reads.
However, market headwinds, particularly the competitive environment in the cement sector, during the period under review negatively impacted Tanga Cement’s financial operations.
The group sales revenue declined by 1% in H1 2019 to TZS 97.6bn from TZS 98.9bn in the first six months of 2018.
Looking ahead, the company remains positive about 2019 despite the very competitive landscape, as government initiatives to spur economic growth through infrastructure development and promotion of local industries will boost local cement output and consumption while reducing the influx of cheap cement imports.
Tanzania’s largest cement producers are Tanga Cement (Simba), Portland Cement (Twiga) and Dangote Cement.
Africa’s leading cement producer, Dangote Cement indicates that Tanzania’s per capita cement consumption of around 50kg per annum is well below the global average and low even for Africa.
Nonetheless, the company is confident that the framework remains favorable, given the linear relationship between economic growth and cement consumption, and the performances of the Tanzanian economy.