The thriving Tanzania industry and manufacturing sectors have gained the attention of nearly 10 Indian companies, who have recently been sourcing raw materials in East Africa and have decided to increase their presence in Tanzania with an investment of more than USD 250 million to be used both for the construction of factories and for establishing their operations in the country.
According to Cyril Chami, the Minister of Tanzania Trade and Industry, the construction of the factories is set to begin within the next six months.
The largest investor is expected to be Kamal Steel Industries, who is planning to invest approximately USD 220 million in order to build a steel and iron sheet factory.
The proposed Kamal Steel Industries factory is expected to generate nearly 5,000 jobs, a striking contrast to the 400 people that are currently employed at the factory in Dar es Salaam.
In addition to the factory, another Indian investor, Bajaj Auto, is expected to spend close to USD 20 million on the construction of an assembly line for their motorcycles and for their line of vehicles, known as auto rickshaws.
The Bajaj Auto assembly line project is expected to employ approximately 500 people.
According to the managing director of the Economic Processing Zone Authority, Adelhelm Meru, in a report by the East African, other Indian investment projects will include a USD 3 million seed plant project that has been proposed by the Science and Corp Ltd., is in accordance with the Tanzania government’s implementation of the Kilmo Kwanza project and will create an additional 500 jobs.
Additionally, in an effort to take advantage of the shortage of modern packaging options that are available in the country, Lotters Packaging Ltd is planning to invest USD 1.2 million in a manufacturing plant.
Dr. Meru went on to explain that the Indian business mogul, Mukesh Ambani, has also announced his plans to invest in a chain of luxury hotels in the country so as to best take advantage of the growing Tanzania tourism industry.
Additional investors, including UK Electrical (India Ltd), are reportedly planning to produce water pumps, while others have expressed interest in building factories that will produce both mechanical spare parts and small machines.
In spite of the fact that Tanzania economy relies heavily on the agriculture, mining and tourism sectors, reports indicate that the ever-advancing sectors of energy, financial services, manufacturing, telecommunications and transport sectors are also beginning to attract investors who see the likelihood for promising returns.
According to the recently published Bank of Tanzania Investment Climate 2010 report, not only is the country generally favorable toward foreign direct investment, but Tanzania has also made some substantial efforts to encourage foreign investment in their economy.