Dangote
Cement, based in Nigeria, is building a 1.5 million tons per annum
integrated cement plant valued at USD 500 million in Mtwara, Tanzania.
The plant is expected to double the
production capacity of cement in Tanzania and thereby reduce the cost of
cement in Tanzania and the region.
Mtwara was selected as a new site due
of Tanzania’s richness in limestone and gypsum deposits and the fact
Tanzania attracts sound investment opportunities in the sector.
As stated by Aliko Dangote, Chairman
of Dangote Group, “Our investment in this sector, which is outside the
traditional mining sector, is to take advantage of the abundance of
limestone in the country and work towards making Tanzania
self-sufficient in cement production.”
Presently, Tanzania has an estimated
production capacity of 3 million metric tonnes per annum against a
demand of 2.2 million tonnes per annum.
The improving performance of the
economy has fueled strong growth in cement demand and the prospects
remain favourable, given the linear relationship between economic growth
and cement consumption.
However the current differential
between demand and production capacity, coupled with the high cost of
energy and imported clinker, makes the average cost of cement per tonne
in Tanzania between USD $90 and USD $105.
Similarly, a 50-kilogram bag of
imported cement retails at USD 7.8 while locally produced brands sell at
between USD 8 and USD 9.3.
“The plant, once it starts production,
should help reduce the cost of cement in Tanzania and the region,” said
Devakumar Edwin, Dangote Group’s Executive Director in charge of
business development.
Dangote Cement produced around 10
million metric tons of cement in 2012 (with revenues of USD 1.8
billion), and is investing more than USD 2.5 billion to build more than
18 million tonnes of production and import capacity across thirteen
African countries beyond Nigeria. |
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