By The Respondent reporter
The Tanzanian government, in collaboration with the Amsons Group, has announced a significant investment of $320 million (over 800 billion Tanzanian shillings) aimed at boosting production capacity at Mbeya Cement.
During a press briefing on October 15, 2024, Treasury Registrar Mr. Nehemiah Mchechu outlined the investment details, specifying that $190 million will be allocated to establish a new cement factory in Tanga, while $130 million will go towards expanding the existing Mbeya Cement Company. This initiative is expected to enhance clinker production—a crucial raw material for cement—by tenfold, increasing daily production from 1,000 tonnes to 5,000 tonnes.
The new facility, to be located along Mombasa Road in Tanga, will also contribute an additional 5,000 tonnes of clinker production, raising the total capacity to 10,000 tonnes per day. Mr. Mchechu emphasized that the projects will take two to three years to complete and are currently in the final stages of management preparations.
"This increase in production will solidify our market share in the Southern Highlands, which currently exceeds 70 percent," Mr. Mchechu stated, adding that it will also facilitate entry into neighboring markets in Zambia, Malawi, and the Democratic Republic of the Congo.
Amsons Finance Director Mr. Ahmed Mhada noted that the expansion would elevate annual cement production from 1.1 million tonnes to 4.2 million tonnes.
He expressed optimism that the rise in production would lead to a tenfold increase in dividends for the government, which currently holds 25 percent of Mbeya Cement's shares.
Last year, the government received a dividend of 3 billion shillings, which could potentially increase to an average of 30 million shillings once the projects are operational.
Looking at the broader picture, cement production in Tanzania reached 11 million tonnes by December last year, significantly exceeding the demand of 7.5 million tonnes. The expansion of Mbeya Cement is projected to create approximately 12,000 direct and indirect jobs.
Prof. Siasa Mzenzi, Interim Chairperson of the Mbeya Cement Board of Directors, praised President Samia Suluhu Hassan's pro-business approach, highlighting her political will in fostering a conducive environment for attracting investment to Tanzania.
Mbeya Cement is primarily owned by the Swiss-based Amsons Group (65%), with the Tanzanian government holding 25 percent through the Office of the Treasury Registrar and the National Social Security Fund owning the remaining 10 percent.