Simba cement profit surges 56 per cent

Tanga Cement Plant

Tanga Cement has posted a net profit of 15bn/- for the first half of the year, an increase of 56 per cent from 9.9bn/- in the corresponding period last year.

The cement firm that trades on the Dar es Salaam Stock Exchange as Simba has attributed the profit surge to exports and improved supply of electricity during the period.

Simba Cement’s acting Chairman, Prof Samuel Wangwe said: “With substantially reduced maintenance and electricity costs, gross profit for the period increased by 40 per cent to 30.25bn/-,” Prof Wangwe said in the statement issued.

The gross profit was pushed by sales volumes that rose 14 per cent over the same period last year, including a 35 per cent rise in export. “…the firm is well positioned to take full advantage of its production capabilities to exploit the growing markets in Eastern Africa,” he said.

During the same period, the company experienced no major mechanical problems between January and June, whereas last year a kiln was stopped for almost six weeks for major refurbishment.

On the other hand, the availability of rail transport declined compared to the first half of 2012, with only 170 wagons being loaded, a drop of 58 per cent to push up the cost of sales to 59.78bn/- from 50.67bn/-.

A study carried by Tanzania Securities entitled: ‘Equity Research Cement Sector Local Listed Companies indicates that the country is expecting to become a net exporter of cement in the next two years, with her production capacity standing at 3.25 million tonnes per annum and likely to double in the next three years to 6.75 million tonnes.

“We consider Tanzania’s prevailing price of 120 US dollars per tonne to be competitively very low versus West Africa’s 200 US dollars per tonne,” the study shows.

The study’s projections indicate that prices will continue to fall to between 90 -105 US dollars per tonne in the medium term and translate into higher export levels to available markets of Rwanda, Burundi, DRC and Zambia with 200 US dollars.

Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza

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