Construction of the new Sh8.5 billion cement plant in Tanzania is currently underway due to the sponsorship of the Kenya based firm, Athi River Mining Limited (ARM), who has since announced their plans to cross-list at the Dar es Salaam Stock Exchange within the next two years, which will allow the Tanzania economy to benefit from the anticipated success of the project as well.
According to the existing Managing Director of ARM, Pradeep Paunrana, plans to restructure the company and to establish a holding company which will eventually list with the DSE, are currently already in progress and are expected to be completed soon.
“We plan to list as soon as the project is ready to bring in more investors,” said Mr. Paunrana, “and [in doing so] enable Tanzania citizens to share in our success.”
To this end, President Kikwete has said that the Government will put more incentives in place in order to attract more foreign investment to the country.
Subsidiaries of the Athi River Mining Limited (ARM) are operational in several different African countries as well, including Kenya, Zambia and South Africa.
In addition to locations in these countries, ARM is also currently looking into further developing potential interests in other neighboring African countries as well.
“We have chosen Tanzania as one of our investment destinations because the country is endowed with industrial minerals, which form the necessary development of a modern economy,” said Mr. Paunrama, “Therefore, we will continue to re-invest profits from my company back into Tanzania to add to the capital formation and industrial base of the country.”
Recently, the earnings per share that ARM receives have increased from Sh1.25 in 2004 to Sh4.26 last year, at which time, ARM also recorded a net profit of Sh422 million.
The completion of the cement plant is expected to further boost the market capitalization of the company from Sh12 billion to Sh34 billion.
The number of Kenya based companies listed on the Tanzania regional securities exchange currently stands at three, citing corporations such as Kenya Airways, East Africa Breweries Ltd and Jubilee Holding Ltd.
The addition of an ARM listing on the DSE in the coming years will increase the number of foreign listings on the securities exchange to four.
The ARM announcement of its plans to cross list in the DSE not only affects the domestic economy, but also further enhances existing plans in the East African zone to create a regional stock market.