TPCC Annual Report 2008.indd - HeidelbergCement

Tanzania Portland Cement Company Ltd, Annual Report 2008
Managing Director’s report
Another very challenging and satisfying year is behind us. The demand for our products remained strong and our
operation performed well. The on-going expansion project is nearing conclusion and I am particularly pleased that we
were able to start production on the new cement grinding and packing plant in third quarter of 2008 thereby easing
the difficult supply situation. The financial result for 2008 was the best ever in the Company’s history. Despite a more
difficult economic climate, I am convinced that TPCC will continue its positive developments and deliver value to our
shareholders.
Sales
After unusually strong growth in 2007, and despite the
world-wide economic slow-down that started in 2008,
the domestic market for cement grew throughout 2008.
Tight supply conditions in the early part of the year re-
sulted in periodic shortages and some speculation in parts
of the country. The situation eased in the second half of
the year when TPCC’s new production capacity came into
production.
In 2008 we strengthened our level of service to the
large contractors and other professional cement users
by expanding our bulk handling capacity and increasing
our number of mobile silos. We were also able to ensure
increased and regular supplies up-country; our sales in the
Lake and Dodoma regions grew strongly. Despite increas-
ing cost of production inputs, TPCC has not increased its
sales prices since March 2008.
Production
From a technical point of view, 2008 was a very challeng-
ing year. Full capacity utilization of the old production
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lines continued throughout the year. In order to ensure
sufficient market coverage maintenance stops were kept
to a minimum.
The production level was, however, periodically affected
by the construction activities on the new production line.
Interruptions in fuel and electricity supplies, as well as
stops to allow CBMI to work on the interfaces with the
existing factory, were unavoidable.
We have continued to import clinker as a supplement to
our own in order to meet the cement demand. We expect
that this import activity will cease now when the second
part of our expansion project (the clinker production line)
comes on line (see section about the expansion project).
Financial performance
Revenues increased by a healthy 24% in 2008 – although
down from 49% previous year. Like in 2007, cost of sales
grew faster than revenues due to cost of imported clinker,
international freight and transport rates, accelerating do-
mestic inflation and cost of energy.
From the ground breaking ceremony, 28 September 2007 Transport of the new cement mill from port to factory