Tanzania: Twiga Cement closing business next month?

Tanzania Portland Cement Company, more popularly known as, Twiga Cement, has said it will decide next month whether to suspend production and put on hold a USD60 million expansion plan or continue with operations.

It will all depend on the speed with which the government will abide by a court ruling and evict villagers who have invaded the firm’s premises at Wazo Hill on the northern outskirts of Dar es Salaam.

TPCC Managing Director Pascal Lesoinne said in an e-mailed response to questions sent to him recently that the firm’s board of directors will meet next month to review its plans, meanwhile adding that they have been considering boosting annual production capacity at the factory to 2 million tonnes from 1.4 million tonnes.

“We are still confident that the government of Tanzania will bring a quick and agreeable end to this ongoing issue, but we need to stress that if this is not be done in good time and properly, we will have to halt production and further investments,” he noted.

The MD said the firm accounts for a 45 per cent share of Tanzania’s cement market, making it the country’s biggest producer of the all-important building material.

The firm acquired the land where its cement plant is situated between the 1960s and 1993, when it bought out 200 villagers, according to a Tanzania Court of Appeal ruling dated August 4, 2010.

In 2000, “people started invading the area and built small huts,” according to the ruling, a copy of which the firm sent to Bloomberg on Friday.

The High Court ruled in 2008 that the company is the legal owner of the land and ordered the government to relocate the squatters, court records seen by this paper shows.

The MD explained that the firm’s officials met government officials last month to discuss ways to implement the ruling and were confident the government would take appropriate actions early this week.

Alongside planning to boost cement production capacity, the firm is also considering building a second plant next year, to be completed in 2013, said the MD but without providing further details.

TPCC, which has 360 bona fide employees alongside 250 others engaged “indirectly”, is listed on the Dar es Salaam Stock Exchange. Its shares closed unchanged at 1,960/- on Friday, according to data on the bourse’s website.

Last month, the cement firm threatened to close down its Wazo Hill plant in Dar es Salaam “soon” unless the 952 Chasimba villagers said to have invaded its premises heeded a court order and moved out.

The company’s lawyer, Sam Mapande, said they were contemplated the unprecedented measure after the relevant (government) authorities failed to remove the villagers illegally occupying the land.

“We are going to close down the plant owing to the prolonged land dispute between the company and the villagers. But we also blame the government for not taking the initiatives to remove the villagers from this land,” he noted.

The lawyer said they were just waiting for instructions from the firm’s headquarters in Germany on the date they would have to effect the move, adding: “They (company headquarters) are now discussing this matter following our report on the situation.”

He said although Twiga Cement is the lawful owner of the entire piece of land comprising plots with numbers 1, 4, and 7 respectively at Tegeta Wazo Hill in Kinondoni District within the city, Chasimba villagers were a constant threat to the factory’s management.

This paper has reliably learnt that the factory’s closure would deny the government more than 25bn/- in income taxes every year.

The delay in removing the villagers has already forced the factory’s management to suspend construction of a USD100million cement processing plant within the same area.

In a recent twist to the saga, Chasimba villagers last month accused Kinondoni Municipal Council of engineering a plan to kick them out of the land so that they could divide it into plots for sale to other people.

The villagers’ representatives, Eliackimu Mwaipaja, Charles Jackson Muhila and Rajabu Ali, said in an exclusive interview with this paper that the council was planning to sell the plots to other investors.

Vowing to die on the land if the government sought to forcibly remove them from the area, the representatives argued that the 2008 court ruling did not say that they be relocated but merely said they should vacate to give room to the factory to carry out its operations.
SOURCE: THE GUARDIAN