Twiga Cement has distanced itself from recent increases in retail cement prices, saying it has maintained its factory price despite rising demand, with some retailers selling a 50kg bag for up to Sh23,000.
The company said a bag leaving its factory is priced at Sh11,227, before transport and other costs are added along the distribution chain.
The clarification came yesterday when Tanzania Revenue Authority (TRA) Commissioner General Yusuph Juma Mwenda visited Twiga Cement’s factory in Dar es Salaam to observe production and discuss the recent price increases with management. The visit follows complaints from consumers over rising cement prices, which recently prompted Vice President Deogratius Ndejembi to direct government leaders to explore ways of reducing prices through discussions with manufacturers.
Mr Mwenda said TRA was examining the cement supply chain to establish factors behind price increases reported in some parts of the country.
‘Although TRA has the responsibility of collecting taxes, we also have a responsibility to facilitate business. Therefore, we are fulfilling this responsibility as part of efforts to facilitate business for the public,’ he said.
He said Twiga Cement and Tanga Cement, which have the same ownership, were among Tanzania’s major cement producers and taxpayers.
A TRA team would remain at the factory as part of its monitoring of developments in the cement market, he added.
Senior Manager at Twiga and Simba Cement, Danford Semwenda, said the company’s Wazo and Tanga factories were operating normally and had neither reduced production nor increased prices.
He said the company had investigated reports of higher cement prices and found that the increases were occurring at the retail level rather than at its factories or among its wholesale distributors.
‘Twiga Cement and Simba Cement have not reduced production, we have not increased prices and our distributors have not increased prices. The price has increased at the retail level,’ Mr Semwenda said.
He said demand had increased after construction activities slowed during prolonged rains at the beginning of the year, reducing cement consumption.
‘From June, July and August, Twiga Cement has been able to produce an average of 160,000 tonnes per month,’ he said.
Mr Semwenda said Tanzania had annual cement production capacity of more than 15 million tonnes against consumption of about 10 million tonnes.
He said the company’s factory price remained Sh11,227 per bag, with transport and other distribution costs accounting for differences in prices at retail outlets.
In Ubungo, for example, a bag of Extra cement was selling at Sh16,940, while Standard 42.5 was priced at Sh18,040.
He said retail prices of between Sh21,000 and Sh23,000 could not be attributed to price increases by Twiga Cement or its major distributors.
Mr Semwenda said the current increase in demand was temporary and that higher utilisation of production capacity across the industry would help ease supply pressures and reduce the conditions that could drive further price increases.