CHAIRMAN'S STATEMENT 2014.
I am pleased to inform you that once again this year our Company has reported another successful year in terms of revenue and profit growth over the last financial year 2013.
The Company recorded revenue of Tshs. 14.6 Billion. This was a growth of 35% from Tshs 10.8 Billion in the financial year 2013.Profit after tax also registered a remarkable growth of 102% to Tshs 2.0 Billion from
Tshs 998 Million in 2013.
Cumulatively, since 2011 when we started the turnaround strategy, we have managed to roll back the Company’s accumulated losses from Tshs 6Billion in 2011to Tshs 1.7Billion this year.
It is the Board’s anticipation that the remaining accumulated losses will be completely wiped out by the third quarter, 2015. This will mean that our MISSION 6:3 will have been achieved and thereby making the shareholders prospect of receiving a dividend by the end of the financial year 2015 ever more realistic for the first time in the last 15 years since listing the Company in the stock market.
I am also pleased to inform you that the monies raised from the rights issue exercise, Tshs 4.4 Billion were fully utilised in the areas planned for as summarised below:
1) Tshs 2.3 Billion was used in the 1st phase of Aspen plant rehabilitation.
2) Tshs 0.97 Billion was used in CO2 storage and transporting capacity
3) Tshs 1 Billion was used in assorted equipment and asset acquisition. E.g. Mtwara land, standby generators for Mwanza and Dar es Salaam factories and extra cylinders etc.
4) Tshs 0.16 Billion was the cost of the rights issue itself.
Aspen 1000 plant
As mentioned above, the first phase of the Aspen plant rehabilitation was concluded in September – October 2014.
The plant is now operating at the efficiency rate of 80-90% compared to 20%-37% pre-rehabilitation. This will result in cost savings on power bills. Likewise the increased storage capacity will ensure reliability of supplies and thereby strengthen the Company’s position in the market as a reliable supplier of quality gases.
The last phase of the Aspen rehabilitation scheduled for the third quarter of the year 2015 will see the plant fully rehabilitated and able to produce pure argon gas thereby completing the full rehabilitation as had been promised. In summary, Aspen plant has reached a level of reliability and efficiency sufficient for the Company to be able to confidently commit to supply contracts within and outside the country.
Management has been tasked to develop strategies to market Aspen plant products across the SADC and Eastern African region through a combination of innovative pricing and aggressive marketing. This exercise has already started bearing fruits. Already one bulk customer has been engaged in Zambia through a distributorship relationship. Other cities in the region are being explored for similar arrangements in our efforts to turn Aspen plant into a profit maker.
The Company has also secured a piece of land in Mtwara town. This will be developed into a distribution depot for our products targeting mainly Mtwara oil and gas mining firms and customers across the border in northern Mozambique. However with the slump in international oil prices majority of firms targeted as prospective customers have scaled down their activities. In the short and the near term, the slowing down of the oil and gas sector in the region is expected to have an adverse effect on the Company’s projected revenue growth.
The Company’s CO2 operation continues to receive strong support from customers both locally and across the region. During the year 2014, the Company managed to establish it footprint in the DRC to add to our existing foreign markets of Malawi and Zambia. The CO2 market remains a buyers market hence very competitive but our Company has and is positioning itself for the market in its current structure.
However we will not be complacent instead we will continue on improving our service delivery through compliance to ISO 22000 standards and other food industry regulatory requirements, access of our products by customers throughout the country as well as abroad.
Vote of thanks
I am grateful to and proud of, our dedicated members of staff who have continued to apply themselves diligently and purposefully to deliver value to our valued customers both within Tanzania and abroad. Similarly, I would like to thank the Board of Directors, Management, our valued customers and all stakeholders for their loyalty and support.
Lastly I would like to thank you shareholders for your steadfast commitment to the success of our company.
Thank you all and God bless you.
Eng. Harold Temu