At least 500 people will be employed under the USD15m investment in furniture and ceramic utensils, which is expected to start operations later on this year.
The money has been invested by a Tokyo-based firm, Nitori Company Limited through a Tanzania Export Processing Zone (EPZ) arrangement.
Speaking in Dar es Salaam recently a senior managing director with the company, Shoshim Komiya, said the new investment targets export markets in Europe and America, with a potential for creating about 500 jobs for Tanzanians.
The MD, who led a four-person delegation to Tanzania, said the country is endowed with forestry and high quality clay soil, the main raw materials for furniture and ceramic utensils production, respectively.
“We desperately need to invest in Tanzania and tap the huge raw materials potential…we already have supply orders to meet in America and other developed countries,” said Komiya at a brief meeting at the Export Processing Zones Authority (EPZA).
But, according to EPZA Investment Facilitation Officer Lameck Bohela, the potential investor has had difficulties in getting the building he wanted within the EPZA infrastructure to install the machines.
“The (potential) investor wants 10,000 square metres for phase one of the project that would involve manufacturing of ceramic utensils,” Bohela said, noting that the available buildings measure less than the required space.
According to him the company is now under negotiations with private developers to rent a building for its operations as a stand alone EPZ.
The option of allocating land to the investor for construction of factory buildings has also failed because the investor only wants a ready-made infraastructure to install the machines.
Lack of a fully furnished infrastructure for industrial production is one of the major constraints facing potential investors who come to Tanzania, with reports that about 60 per cent of them are not ready to waste time on constructing infrastructures.
“Many potential investors want ready constructed buildings to install their equipment saying they are manufacturers…and not real estate developers,” Bohela said, arguing that Tanzania is loosing multibillion worth of investments due to lack of factory buildings.
EPZ programme was established following the enactment of the Export Processing Zones Act, 2002, to provide for establishment of export oriented investments within designated zones.
EPZA data show that USD700m (over 1trn/-) worth of investments have created 14,000 direct jobs, with US450m (over 700bn/-) in exports since the EPZ scheme became operational about six years ago.
The programme’s objectives are to attract and encourage transfer of new technology, attract and promote investment for export led industrialisation, create and expand foreign exchange earnings as well as increase employment and development of skilled labour.