[2007-09-18]  Twiga Cement stops dividends, opts for $100m expansion
In what is emerging as a trend in Tanzania’s cement industry, Twiga Cement Company Ltd will not pay its shareholders interim dividends but instead divert funds to a $100 million expansion project.

Twiga’s project aims to meet the increased cement demand, which has grown by about 16 per cent over the last six months.

“The ongoing expansion project will require significant financial resources over the coming months, as well as in 2008 and 2009,” said Elieneza Amon, the firm’s company secretary.

Twiga becomes the second player in Tanzania’s cement industry to choose expansion over shareholder dividends this year. Tanga Cement did not pay dividends to its shareholders but instead channelled funds to a $40 million project to replace its facilities.

Revenue increased by 59 per cent to $57 million, while sales volume rose by 35 per cent.

According to Mr Amon, a strong demand necessitated increased import of clinker, a situation that will continue until the expansion project is finalised in 2009.

The imported clinker, together with higher costs for fuel led to increased costs, the company secretary said.

The company projects a strong cement demand in the second half of the year.

Since last year, the cement maker, whose majority shareholder is Heidelberg Cement, has seen its shares traded at the Dar Stock Exchange under the name Twiga, becoming the second cement maker on the bourse after Tanga Cement.

Mid last year, the company offered 53,975,900 shares — a 30 per cent stake of the Tanzania government holding, worth Tsh23.5 billion ($18.8 million) — for sale to individuals, corporates and workers.

The issue was oversubscribed with applications being received for 212,688,923 shares worth Tsh92.5 billion ($74 million).




Source: Copyright © 2007, Nation Media Group Ltd.