What characteristics differentiate Tanga Cement in such a competitive sector?
The quality of our products is a key differentiator, but so is their sustainability. Our product is consistent across the market. We do not believe in being good one day and bad the next. We have invested in this country and in this company, spending money on equipment that will sustain our presence here for generations. We are definitely the greenest player and there are various ways to measure it; for example, the amount of CO2 produced per ton of cement or the saving we make by implementing technology. We have established bag filters in our new plant, which are designed to European standards. When the new plant was completed it will follow the same rules and standards, with low electricity consumption, low water consumption, and zero emissions.
Are you thinking of expanding to other countries in the region?
Afrisam is a South African-based company, so we form part of the group and represent its African expansion strategy. Tanga Cement as a company does not currently have any ambitions to expand into other countries except via market penetration through sales.
What is your in-country shipping and logistics strategy?
There is no better way to transport cement than by rail. We are blessed by the fact that we are the only cement plant with a rail line right into our factory; therefore, we load directly onto the rail track. Then, we also have depots from which we can offload directly from the tracks again. We never required an intermediate step between the plant and the rail line, which makes us one of the most efficient players in the market. Yes, there is room for improvement as far as rail operations go but we want to be part of optimizing that together with TRL, which is why we have signed an agreement with it.
What are the main challenges Tanga Cement faces?
Our top three challenges are price, taxation, and newcomers. We are in an extremely competitive environment and Tanzania is one of the few countries that for the past 10 years has been able to achieve consistent growth. This attracted other players to the market, which has put pressure on prices. Some importers have brought a large amount cement in through the ports, and unfortunately there are many illegal imports as well.
What opportunities are there with the new government-led drive for sustainable long-term development?
The opportunities lay in the optimization of our footprint, cost structures, and production capacities. At the same time, one has to realize that if they construct a cement plant properly, sticking to the safety standards, financial rules, permits, access to raw materials and so on, it takes at least two years to construct. So in the short-term, for a new investor considering constructing a totally new integrated plant, the opportunities are small, because they need a huge balance sheet to foot this bill.
What are your goals for the near future?
We have implemented a rigorous optimization and efficiency drive within the company, which started in roughly mid-2015. The results for the first half of 2016 were a 55% increase in net profit. The future will continue in this vein because of what we have done and how we have done it. One thing we are happy about is the successful conclusion of our expansion project, which makes us completely independent of any raw material importation. We are self-sufficient in the supply of clinker and can now produce all that is required by the country by using only locally produced goods.