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Uganda Clays Set to Invest UGX 17.8b in Clay-rich Land

Uganda Clays Ltd in Kajjansi. Image source: Independent

UGANDA, Kampala | Real Muloodi NewsUganda Clays Ltd, one of Uganda’s top manufacturers of high-quality baked clay construction materials, plans to invest UGX 17.8b to acquire more clay-rich land to increase production amid rising competition in the baked clay products market.

Martin Kasekende, the chairperson of Uganda Clays’ Board of Directors, stated at the company’s virtual Annual General Meeting on June 29th that the firm also plans to establish a high-performance workplace culture, with an emphasis on developing a customer-focused business.

“This expenditure will be financed entirely from the company’s earnings,” he said.

“We are confident that these investments will propel the company to sustained growth and profitability for many years to come,” he added.

Uganda Clays Ltd invested UGX 10.5b in 2021 to purchase a tunnel kiln, a tunnel dryer, and other associated operations at the Kajjansi factory. These included repairing and expanding the Kamonkoli kiln and purchasing 140 acres of clay deposits in Kajjansi.

The change aided the company’s output. Kajjansi factory initially operated at 90% natural drying capacity. The monthly production capacity then doubled from 300,000 to 600,000 tiles.

The Kamonkoli factory in Eastern Uganda increased its monthly tile production from 270,000 to 360,000.

Mr Kasekende indicated that the company is in talks with the National Social Security Funds (NSSF) to restructure and repay the shareholder debt, which is presently worth UGX 20.6b. It is to be paid in seven years, beginning in 2024.

Uganda Clays received a UGX 11.5b loan in 2010 with a 10-year payback period for the purchase of spare parts in Kajjansi and the erection of a kiln expansion at the Kamonkoli facility. However, the firm failed to repay the debt, necessitating renegotiation, with NSSF agreeing to cap the loan at UGX 20.6b in 2015, awaiting further negotiations on a new repayment plan.

Mr Kasekende noted that the firm will be able to repay the debt based on current cash flow projections.

The top five shareholders have been revealed to be; NSSF, which will earn the biggest dividend of UGX 438.9m, then National Insurance Corporation (NIC) with UGX 241.2m, Timothy Sabiti Mutebile with UGX 48.7m, Jones Muhumuza with UGX 32.6m and Moses Sanye with UGX 31.6m. Therefore, Uganda Clays’ shareholders shall earn UGX 1.5m per share as dividends for 2021.

Following a period of chronic losses, the company’s earnings increased by 21%.

Reuben Tumwebaze, the company’s Managing Director, stated that the company is currently looking at regional markets such as Kenya, Burundi, Northern Tanzania, the Democratic Republic of the Congo, and South Sudan.

“We will be on boarding agents from Kisumu and Mombasa …our goal is to have a presence across the greater East African region,” Mr Tumwebaze said.

Mr Tumwebaze further stated that the business intends to embark on a number of significant transformational initiatives to strengthen the management of its clay quarries and materials management throughout the clay factory value chain.

He stated that the corporation intends to engage in talent development and leadership programmes in order to attract, retain, and develop tomorrow’s leaders.

Uganda Clays is also working on founding an organisation that would unite clay makers to advocate for their needs and begin discussions on developing clay product standards.

Furthermore, it is in the advanced phases of constructing an academy in Kajjansi that will provide construction stakeholders with the most up-to-date construction and roofing technology.

“Collectively the group will allow for self-regulation, government support, and environmental protection,” said Mr Tumwebaze.

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