During 2014 Tanga Cement Public Limited Company celebrated some significant milestones and successes
achieved in executing its strategy and living up to its brand promise of being the ‘Pride of the Nation’. We
are proud of our contribution towards the development of Tanzania, but more importantly the lives of the
Tanzanian people we are able to touch and enhance due to our business activities.
Macro-Economic Overview
General market conditions during the period under review have been tough, but positive. We experienced
an increased influx of imports from neighboring East African countries such as Kenya, which was further
enabled by the removal of tariffs between East African countries and easy access to our major markets in
northern regions by competing brands.
At the same time, cheap imports from the Middle East countries have continued to enter Tanzanian markets
creating unfair competition as they benefit from widespread acts of tax evasion through under declaration
of prices and volumes delivered into local markets. Increased smuggling of cement across the border into
Kilimanjaro and Arusha added to pressure to local markets and prices. We are lobbying with Government
as well as the Fair Competition Commission on control of cheaper imports including manufacturing
We have been pleased with the improvements of rail infrastructure in Tanzania which has boosted the
company’s utilisation of rail as a means of transport which resulted in a slight decrease on the reliance of
more expensive road transport. We look forward to further improvements by Tanzania Railways Ltd. in 2015.
Operational Overview
Despite the challenging market conditions, the group managed to record a satisfactory financial
performance with operating profit being 16 percent below 2013. This included a goodwill impairment
of TZS 6.9 billion which if excluded, would result in a decrease of only 2 percent compared to 2013. This
performance can be attributed to increased direct sales to customers and active initiatives to control
and reduce costs. A reflection of this is that our cost of sales remained relatively unchanged at TZS 161.5
billion (2013; TZS 161.4 billion) despite 40 percent increase in Tanesco’s electricity tarrifs which is a major
component of production cost.
Improving operational efficiencies and containing production costs continues to be a major focus for the
company. We experienced some set-backs in terms of overall equipment efficiencies (OEEs) due to some
equipment failure during the year. Improving on OEEs will be a significant focus during 2015.
The company’s net profit after tax decreased by 12 percent to TZS 28.4 billion. This is as a result of the onceoff
impairment of goodwill.
A major milestone achieved during the year was the complete integration of CDEAL, providing the company
with full ownership of the sales and distribution arm of the business. The acquisition will ensure improved
integration and strategic alignment with Tanga Cement Public Limited Company in executing its strategy.
The construction of a second kiln line at Tanga Cement Public Limited Company is making good progress
and is still on track to produce its first clinker in the last quarter of 2015. Once completed, the second kiln
line will more than double Tanga Cement’s clinker production capacity and result in significant cost savings
for the company.
Safety remains our priority and 2014 was no different. We undertook the utmost care to return each employee
home safe at the end of each shift. Whilst we recorded good results on maintaining a low total recordable
injury frequency rate (TRIFR) of below 1 against a target of 6.4, we unfortunately had a fatality at the kiln at
the end of April 2014. This was thoroughly investigated and a lot of lessons were drawn from the incident. We
have implemented these lessons to avoid similar incidents from recurring in the future.
Our environmental performance has remained on track, with the critical emissions below the legal limit on a
monthly average basis throughout the year. The performance and availability of the monitoring equipment
was however an issue, as we could not get the full benefit of anticipated measurements from it. Phase out of
equipment is being considered in mitigation. For the first time a baseline environmental monitoring program
was implemented on site, we now await the initial results from the sampling and measurements. Tanga
Cement Public Limited Company continued to support the local communities by focusing in the four main
areas of Education, Health, Community development and Environment.
Future Outlook
We expect the coming year to remain challenging and expect we will continue to deliver satisfactory results.
A number of projects have been approved by government and private investors, and these should increase
demand for our products. Among the exciting projects is the development of Kawe City, Tanzanite Mall,
Tanzania China Logistic Centre and the expansion of the Dar es Salaam Port.
The board has recommended a final dividend of TZS 65 per share (2013: TZS 60). This amounts to a total final
dividend of TZS 4.1 billion.
Closure of the Share Register
The register of members will close 20th April, 2015 . The last day of trading cum-dividend will be 15th April, 2015.
The final dividend will be paid on or about 31st May 2015.
Our majority shareholder, AfriSam, increased its shareholding from 62.5% to 66.6% during the year. We are
proud of our association with this formidable construction materials company and Tanga Cement Public
Limited Company has benefited greatly over the years from the knowledge and expertise gained through
this relationship. In turn, Tanga Cement Public Limited Company is a critical component and valuable
contributor to the growth and success of the AfriSam Group. We look forward to the many successes both
companies will achieve through our close association.
Finally, on behalf of the Board of Directors, I would like to thank the employees of Tanga Cement Public
Limited Company for the passion they have for the company and their commitment to ensuring its success.
And I also thank the board of directors for their support and our esteemed customers for their loyalty.
We look forward to celebrating many more successes together in 2015.
Advocate Lau Masha