Dangote Cement set to begin production in Tanzania

The sub-Saharan Africa's leading cement producer, Dangote Cement, says it will begin production of cement in Tanzania’s Mtwara region in August.

This is contained in a statement by the Office of Tanzania President Jakaya Kikwete on Monday in Dar es Salaam.

It said the date was announced at a meeting between President of Dangote Group, Aliko Dangote and Kikwete, over the weekend.

The 500 million dollars factory, which has an annual capacity of 3 million tonnes, will double the country's annual output of cement to 6 million tonnes.

However, Dangote faces challenges in accessing coal and natural gas as sources of cheap power to run the factory.

Tanzania, East Africa's second-biggest economy, has made big natural gas discoveries and has coal reserves of up to 5 billion tonnes, but lacks infrastructure to deliver the energy to major factories.

Dangote's factory is being built in the Mtwara region but there is no infrastructure to connect the plant to gas from nearby offshore natural gas fields.

Dangote applied last year for a licence to build a 75 megawatt coal-fired plant in Tanzania that would power the cement factory.

Initially, it will power the plant from electricity on the grid.

The Dangote Group plans to roll out plants across Africa to reach an annual capacity of 62 million tonnes by 2017, up from an estimated 42 million tonnes last year.

The Tanzanian plant will supply the domestic market and export to landlocked countries in the region.

It will be competing with other Tanzanian cement producers, including Tanzania Portland Cement, owned by a subsidiary of Germany's Heidelberg Cement AG.

There is also the Tanga Cement, owned by Afrisam Mauritius Investment Holdings Limited; and Mbeya Cement, owned by France's Lafarge SA.