Alaf doubles profit amid escalating costs

Alaf Limited defied business odds to double its net-profit last year despite escalating inputs costs that chewed almost three-quarters of the total revenues.

Alaf, which celebrated its golden jubilee for roofing the country three years ago, announced a net profit of 5.1bn/- in the financial year ending December 31, 2012, double the previous year’s 2.5bn/-.

According to the firm’s financial statements, Alaf generated 152bn/- in revenues, with the costs of sales rising by 0.07 per cent to 125.3bn/-. 

The high costs of sales consumed the revenue generated last year to leave the biggest roofing material manufactured in the country with a gross profit of 26.3bn/-.

Alaf reduced losses from foreign exchange by over 90 per cent to 1.68bn/- from 3.2bn/-. Also selling and distribution expenses dropped by 19 per cent to 1.67bn/-. The input expenses surged slightly though remaining higher due to energy costs.

A report by the Confederation of Tanzania Industries (CTI) about two years ago shows that power supply interruptions cost the local manufacturers 31bn/- per annum due to the use of generators. 

The report reveals that 24 hours of work are lost monthly and 7,341 jobs are terminated annually owing to electricity problem in manufacturing firms.

“About 18.9 per cent of the total cost of production is accounted for by energy cost,” the report says. CTI also said in its last month meeting with Treasury that the availability of natural gas in the country was insufficient and its price was very high.

Alaf is a customer-orientated company, primarily focusing on the local markets and neighbouring landlocked countries. 

It was established in 1960 and today is the leading manufacturer and supplier of cold rolled steel coils, roofing, galvanised corrugated iron sheets, pipes, hollow sections and aluminium products in Tanzania.
Source: The Daily News reported from Dar es Salaam

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