DAR ES SALAAM, Aug 31 (Reuters) - Tanzania Portland Cement Company(TPCC), majority owned by Germany’s Heidelbergcement, on Thursday posted a 45.6 percent drop in first-half profit after an output glut in east Africa’s second-biggest economy forced down cement prices.
Annual cement production in Tanzania is about 10 million tonnes, roughly twice the level of demand, with the surplus exported to eastern and southern African markets.
TPCC, Tanzania’s biggest cement maker, reported net profit of 12.35 billion Tanzanian shillings ($5.5 million), down from 22.71 billion shillings a year ago.
Revenue of 119 billion shillings was down 16 percent year on year, Chairman Hakan Gurdal said in a statement, adding that the decline was mainly because of the lower prices in an increasingly competitive market.
Gurdal said that TPCC would continue to implement “strict cost controls” in an effort to reduce cost of sales and administrative expenses.
“The market situation remains challenging but TPCC will continue to work to maintain its market leadership,” he said.
The cement maker, which is 69.25 percent owned by HeidelbergCement through Scancem International DA, said on its website that it holds about a 36 percent market share in Tanzania.
The remainder of the company’s equity is listed on the Dar es Salaam Stock Exchange.
Other cement makers present in Tanzania include a unit of Nigeria’s Dangote Cement, Kenya’s ARM Cement and subsidiary plants of Afrisam Mauritius Investment Holdings and Franco-Swiss cement group LafargeHolcim. ($1 = 2,236.0000 Tanzanian shillings)
Reporting by Fumbuka Ng'wanakilala; Editing by David Goodman