Tanzania Cigarette Company Limited (TCC.tz) 2018 Annual Report

  We have extracted below the Chairman’s Statement from the 2018 annual report of  (TCC.tz), listed on the Dar es Salaam Stock Exchange:

Our results demonstrate the agility of our people to respond to challenges, the strength of our wide choice of brands and re-affirm our strategies to grow the business

Dear Shareholders,

Welcome to our Annual Report for the year ended December 31, 2018. On behalf of the Board of Directors of Tanzania Cigarette Public Limited Company (TCC Plc), I am pleased to report a strong set of results for the year.

Strong performance

The business delivered a strong performance with a volume growth of 5 % and net profit growth of 6 % on prior year. This performance was driven by strong export volume, pricing in the domestic market and operational cost efficiencies. These results demonstrate the agility of our people to respond to challenges, the strength of our wide choice of brands and re-affirm our strategies to grow the business. In view of the strong results for the year, the Board of Directors has recommended a final gross dividend of TZS 250 per share. This dividend is subject to approval by shareholders at the Annual General Meeting on April 3, 2019. The final gross dividend, including the TZS 200 interim gross dividend paid in October 2018, brings the total gross dividend for the year ended December 31, 2018 to TZS 450 per share.

A conducive business environment We commend the government for initiating measures to improve the business environment and investor confidence.

The launch of the “Blueprint for Regulatory Reforms to Improve the Business Environment” in 2018 is a clear example. We hope the government will implement its recommendations and enhance transparency, supportive ruled based decisions, policy predictability and accountability which are essential for a conducive business climate.

Corporate governance

Good governance has always been a key priority for the company. Our obligations to comply with regulatory requirements go beyond compliance to ensuring that we deliver results with integrity. In line with the Company’s Articles of Association, the Board and its respective committees met twice during the year under review to conduct its affairs.

In 2018, key initiatives included approval of the Audit and Nomination Committee Charters, which set out roles and responsibilities of the respective committees.

New board appointments

Olivier Chimits and Andrew Bingham, both non-executive directors, retired from the Board in January 2018. We thank them for their immense participation, contribution and guidance during their tenure. We welcomed Luca Meroni and Bertrand Tamisier in January 2018 and Baraka Katemba in April 2018 as non-executive directors. Their contribution to the Board throughout 2018 has been invaluable and we look forward to their continued advice. Fulfilling our responsibilities to key stakeholders As a company, we always strive to fulfill our responsibilities to our key stakeholders consumers, shareholders, employees and the community we operate in. We carefully consider their respective interests and strive to exceed their expectations wherever possible.

To this end, TCC Plc continued to be a source of talent for other JTI markets around the world, a clear reflection of the importance and quality of our investment in people. Moreover, our community programs in poverty reduction, support to the disabled and arts & culture have improved the lives of over 3,000 people. In addition, our environmental protection programs continued to deliver positive results. We reduced our energy consumption by 13%. We cut carbon dioxide emissions by 14% and production waste by 11%. And improved use of recycled water by 8%. These results reflect our desire to reduce ecological footprint in our production process and promote the use of cleaner energy.

Confidence in the future

On-going initiatives to improve the business climate and investor confidence point to a brighter future. We hope the government will implement recommendations of the “Blueprint for Regulatory Reforms” to address impediments to a more conducive business environment. We expect the government will sustain the positive macro-economic achievements of 2018. We are encouraged by on-going significant investments in energy and transport infrastructure which will unlock further business opportunities in and outside Tanzania. We are optimistic that peace and prosperity will prevail in the DRC, a key export market, following the peaceful transition of power in early 2019.

Appreciation

As we continue with our epic journey, I would like to take this opportunity to extend my sincere gratitude to fellow Board members for their effective oversight role and wise counsel. I am also grateful to the Management and employees of TCC Plc for their hard work and unwavering commitment to consistently deliver on our business objectives. I wish to extend gratitude to business partners, our customers and consumers, and you, our esteemed shareholders for your support and trust.

Paul Makanza
Chairman of the Board