UGANDA, Kajjansi | Real Muloodi News | Uganda Clays Ltd, a prominent building materials manufacturer, is poised for expansion as it expresses confidence in clearing its USh20 billion loans from the National Social Security Fund (NSSF).
The company recently reached an agreement with NSSF to cap the loan and extend the repayment period.
In 2010, Uganda Clays Ltd secured an USh11 billion loan from NSSF to support the construction of a factory in Kamonkoli, Budaka District.
However, the loan remained unsecured and accumulated over time. Last year, the two parties agreed to cap the loan at USh20.6 billion and extend the repayment period until 2030.
Eng. Martin Kasekende, Chairman of Uganda Clays, provided updates on the loan restructuring agreement during the company’s Annual General Meeting held virtually on June 30th.
He stated that repayment would commence in January 2025, allowing a five-year timeframe for payment. Kasekende also assured shareholders that the loan is fully secured, with the company providing land titles as collateral.
During the AGM, Jones Muhumuza, the Head of Finance at Uganda Clays, shared the company’s ambitious expansion plans.
As the macroeconomic outlook in Uganda and internationally improves, Uganda Clays aims to establish a large-scale tile plant in Kajjansi. This plant is expected to enhance output, efficiency, and product variety.
Muhumuza revealed that the company is acquiring a new tile plant from Italy, set to be operational next year.
The introduction of this fully automated tile line will result in improved efficiency, increased product output, and enhanced product quality.
The installation process has already commenced, and upon completion, it is projected to reduce turnaround time from days to hours.
During the AGM, the board chairman announced a dividend payout of USh0.5 per share for the year ending December 31, 2022, amounting to a total dividend payment of USh450 million. This marks a decline from the previous year’s dividend of USh1.5 per share.
The board chair attributed the decline in company profits to various factors, including increased costs, particularly on imports due to the weakening of the Uganda Shilling.
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