Tanzania’s Heidelbergcement posts 45.6% drop in profit

The firm's chair Hakan Gurdal said the decline was mainly because of the lower prices in a market that is increasingly becoming competitive.

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Tanzania's Heidelbergcement posts 45.6% drop in profit

Tanzania Portland Cement Company(TPCC) says its first-half profit has dropped attributing it to an output glut forcing down cement prices.The firm is majority owned by Germany’s Heidelbergcement.

It announced Thursday that it posted a 45.6 percent drop in profit representing 12.35 billion Tanzanian shillings ($5.5 million), down from 22.71 billion shillings a year ago.

Chair Hakan Gurdal said the decline was mainly because of the lower prices in a market that is increasingly becoming competitive.

Mr Gurdal sad that Heidelbergcement now focuses on tight cost control aimed at reducing cost of sales and administrative expenses.

Read More:Bamburi net profit drops, cuts dividend payout

“The market situation remains challenging but TPCC will continue to work to maintain its market leadership,” he said.

Other cement makers jostling for the Tanzanian market 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.

Together they produce about 10 million tonnes, roughly twice the level of demand, with the surplus exported to eastern and southern African markets.

In Kenya, largest cement maker in Kenya by share Bamburi has announced it suffered a 36.21 per cent drop in profit to Sh1.85 billion from Sh2.9 billion a year earlier in half-year net profit for the period ended June 30.

The Nairobi Securities Exchange listed firm attributes Management attributes the decline to a difficult business environment in Kenya.

Bamburi, majority owned by French conglomerate Larfage, said private sector investment slowed in the review period, hitting the individual home builder segment hardest.

Bamburi reported Sales revenue drop to Sh17.54 billion from Sh19.11 billion last year, an 8.21% drop.

Consequently, the cement maker has more than halved interim dividend payout to shareholders.

Bamburi nevertheless hopes that the Kenyan market will rebound in the last quarter while the Ugandan market is expected to continue performing well in line with the projected growth in both the domestic and regional markets.