Govt seeks PPPs to revive nine defunct factories

13Oct 2021
Geoffrey Nangai
The Guardian
Govt seeks PPPs to revive nine defunct factories

THE government is seeking Public Private Partnerships (PPPs) to revive nine defunct projects and factories as part of its efforts to stimulate the economy.

According to Tanzania Investment Centre (TIC), the joint ventures target key sectors that include manufacturing, agriculture, oil & gas, tourism and real estate among others.

 Last week, TIC in partnership with the Prime Minister’s office issued an investment project booklet that highlights some of the key investment projects seeking different forms of partnerships this year.

According to the TIC Executive Director Dr Maduhu Kazi, the booklet seeks to profile Tanzania’s lucrative projects and promote them to potential partners who will work with the respective companies of government institutions, which supervise particular projects.

Kazi assured all prospective investors that TIC will continue facilitating granting of permits, approvals, authorisations and licences for the proposed projects by relevant government authorities through the one stop shop facilitation centre.

“It is my expectation that potential investors will find this document useful and important source of information for those who will be interested in the projects from respective sectors enlisted in this document,” he said in a statement.

According to the booklet seen by this paper, the government among other projects is seeking joint ventures to revive the Arusha Tyre Manufacturing Plant formerly known as General Tyre East Africa Limited (GTEA).

The government mandated the National Development Corporation (NDC) to revive the 50.4 acres tyre manufacturing plant, which is expected to produce 320,000 tyres per annum.

According to an assessment done, since the tyre plant has not been operational for many years, it must be completely overhauled so as to put in place a state of the art technology to improve its efficiency. The cost of the project will be determined after the completion of the feasibility study.

During the late 1980s, GTEA was one of the largest tyre makers in East Africa with a production capacity of about 1,000 tyres a day, supplying to the eastern and central African market.

The company was established in 1969 under a partnership between the Tanzania government and General Tyre USA before it sold its shares to Continental AG of German.

Continental AG acquired 38 per cent stake in the company in the mid 1990s leaving the government with a majority shareholding at 62 per cent.

Information shows that productivity at the factory started to decline at the end of the 1990s when imported and second-hand tyres flooded the domestic market.

 In the year 2005, the firm acquired a loan of about $10 million from NSSF under the guarantee of the government to revitalise the factory but it failed to do so. The debt is said to have appreciated to $14 million due to accumulated interests.

GTEA stopped production in 2007 when Continental AG demanded yet another $2 million loan from the government, which turned down the request.

Other projects where the government seeks joint ventures include Kilimanjaro Machine Tools Manufacturing Factory (KMTC) in Tanga and Modern Meat Processing Plant in Dodoma, TAMCO Industrial Estate in Kibaha, KMTC Industrial Park in Moshi, Nyanza Glass Works in Mwanza, Sisal and Jute Bags Manufacturing in Dar es Salaam, Fertilisers Manufacturing Industry in Njombe and Tanganyika Instant Coffee Factory in Kagera Region.