Tanzania’s cement industry will get a boost with the construction of a new cement plant in the Tanga region. Image credit: Buildeazy.com

Tanzania’s cement plans are on track as the government starts compensating the almost 100 Tanzanians that has to relocate to make way for the Chinese company Sinoma’s massive plant.

Tanzania seems to be one of the African countries least affected by the outbreak of Covid-19. Its president, John Magufuli, has stated on numerous occasions that the country has overcome the virus. The Covid-19 crisis will surely affect national elections in Tanzania later this year, but expectations are that Magufuli will once again walk away with the honours. Always a controversial figure, the president is not always a favourite amongst expats and foreign investors but remains popular amongst the people of Tanzania.  When Magufuli was elected in October 2015, he promised to eradicate corruption, and targeted a range of interest, including several large mining companies. However, serious questions have been raised, especially from exploration companies that had their licenses revoked by Magufuli’s Fith-Phase Government. But many Tanzanians feel that the president is looking after their interests. In 2017, 72% of Tanzanians said corruption had decreased ‘somewhat’ or ‘a lot’ over the preceding year, compared to 13% in 2014. Similarly, 71% said the government is fighting corruption ‘fairly well’ or ‘very well’ compared to 37% in 2014.

Nonetheless, Tanzania remains one of the best countries in East Africa to do business in. But there is tough competition as several companies from a range of countries scramble to establish themselves in this strategically important region of Africa. Chinese companies seem to have the upper hand. Before Covid-19, the cement industry in Tanzania and Zanzibar showed an uptick as confidence levels increased. Even if Covid-19 will set back many of these projects, cement companies continue looking at Tanzania as an area of growth.

A new USD1-billion cement plant, Sinoma, is in the pipeline as preparations get underway for construction to begin. The Sinoma cement factory will be built by China’s state-run Sinoma International Engineering Company, a subsidiary of China National Building Materials Group Corporation (CNBM) in collaboration with Hengya Cement, another company with Chinese roots.  The Sinoma team has started compensating 94 Project Affected Persons (PAP) that had to be relocated to make way for the construction work.

According to Martine Shigela, the Tanga Regional Commissioner, the 94 PAP are residents of the Amboni and Mtimbwani districts, agreed to relinquish their land four years ago. The land needed for development and from where these people need to relocate, is about 1280 acres.

Upon completion, Sinoma will be the largest cement firm in the East African region, with the capacity to produce about 7 million tons of cement per annum.  At least 70% of the cement produced at the plant will be exported to neighboring countries such as the Democratic Republic of the Congo (DRC), Uganda and Sudan, while the remaining 30% will be sold in the domestic market.

The construction of Sinoma cement plant also includes the construction of a power plant with the capacity to generate 1200MW of electricity using coal. This electricity will be mainly used to power the cement factory.

Furthermore, according to a press release from the office of the prime minister of the East African country dated back in 2017, the Chinese consortium will also construct a wharf at the Port of Tanga to facilitate the export of cement from the plant.

Doing business in Tanzania

 

Topics DB 2018 rank DB 2018 rank Change in rank
Starting a business 163 162 ▼ 1
Dealing with construction permits 150 156 ▲ 6
Getting electricity 83 82 ▼ 1
Registering property 146 142 ▼ 4
Getting credit 60 55 ▼ 5
Protecting minority investors 131 129 ▼ 2
Paying taxes 167 154 ▼ 13
Trading across borders 183 182 ▼ 1
Enforcing contracts 64 58 ▼ 6
Resolving insolvency 117 108 ▼ 9

 

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