New 1.5 Million-Ton Cement Plant Will Boost Tanzania's Regional Exports

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--In the southeastern African country of Tanzania, the construction and housing sector is driving a compounded annual growth rate (CAGR) of about 10%.

The country's cement production will have grown 18% by the end of this year, which is significantly above the 13% regional rate of growth in the sector, reports Tanzania Securities Limited (TS) (Dar es Salaam, Tanzania). The retail and business sector will take 60% of the cement growth, infrastructure projects will consume 20%, and the remaining 20% will go to mining projects.

Moremi Marwa, chief executive of TS, said that the report was good news for potential investors who should buy stocks of cement companies due to the economic momentum in the country quickly returning to pre-global financial crisis levels.

Currently, Tanzania produces 3 million tons of cement annually and demand stands at 2.2 million tons. The three major producers are Tanzania Portland Cement Company (Dar es Salaam) with 1.4 million tons of annual production capacity, Tanga Cement Company Limimted (Tanga, Tanzania) with 1.25 million tons of capacity, and Mbeya Cement Company Limited (Dar es Salaam) with 350,000 tons of annual production capacity. The per capita consumption in the country is 50 kilograms annually, which is the lowest rate in Africa. However, development plans for the construction of roads and bridges is expected to give the consumption rate a boost.

With the launch of Kenya's Athi River Mining's (NBO:ARM) (Nairobi, Kenya) $120 million Maweni Limestone project, production capacity of 4,000 tons per day and 1.5 million tons per year will be added to Tanzania's capacity. The country will be in a strong position to supply regional demand.

Kenya, the largest economy in the East African region, has a current cement production capacity of 2.2 million tons. The demand for cement in the region is forecast to grow at about 5% to 6% in the medium term, which is twice the rate of projected overall economic growth.

For further information see August 24, 2011, article - Kenya's ARM to Build Cement Plant in South Africa in Continental Expansion.

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