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Uganda Clays to invest Shs17.8bn in land, boost production

The company is eying regional markets including Kenya, Burundi, Northern Tanzania, DRC and South Sudan

Kampala, Uganda | ISAAC KHISA | Uganda Clays Ltd will invest Shs 17.8billion to acquire more land with clays and boost production amidst the escalating competition in the baked clays products market.

Martin Kasekende, the chairperson Board of Directors at Uganda Clays Ltd said during the Annual General Meeting held virtually on June.29 that the company also intends to develop high-performance culture and systems with a key focus on creating 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.”

Last year, UCL invested Shs 10.5billion in procurement of a tunnel kiln, a tunnel drier and related works at the Kajjansi factory, repair and extension of the Kamonkoli kiln and purchase of 140 acres of clay reserves near the Kajjansi area.

This helped the clay products producer which initially operated at 90% on natural drying capacity at Kajjansi factory, to increase its production capacity from 300,000 tiles to 600,000 tiles per month. The Kamonkoli plant located in eastern Uganda, too, recorded an increase in tiles production from 270,000 to 360,000 per month.

Kasekende revealed that the company is in discussions with the National Social Security Fund to restructure and pay off the shareholder loan, currently standing at Shs 20.6bn, within seven years starting from 2024.

UCL secured Shs 11.05billion in 2010 with a repayment period of 10 years for procurement of spare parts in Kajjansi and installation of kiln extension Kamonkoli.

However, it failed to service the loan, triggering a renegotiation with NSSF agreeing to cap the loan at Shs 20.6billion in 2015 pending more consultations on a new repayment plan.

Kasekende said based on the current cash flow projections, the company should be able to support the loan repayment.

NSSF, NIC take a lion’s share of dividends

UCL shareholders, meanwhile, will earn Shs 1.35billion or Shs 1.5 per share as dividends for 2021, representing 23% of the net profit.  Off this, NSSF will earn the biggest dividend of Shs Shs438.9million, followed up with National Insurance Corporation Shs 241.2million and Timothy Sabiti Mutebile Shs 48.7million. Jones Muhumuza and Moses Sanye will earn Shs 32.6million and Shs 31.6million, respectively, closing the top five shareholders.

UCL which previous recorded persistent losses, recorded a 21% jump in profit after tax to Shs 5.7billion last year compared to Shs 4.9billion recorded in 2020.

UCL Managing Director Reuben Tumwebaze said the company is now eyeing regional markets including Kenya, Burundi, Northern Tanzania, DRC 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,” he said.

Tumwebaze said the company plans to embark on several key transformational projects to optimize management of its clay quarries and improve materials management across the clay factory value chain.

He said the company also plans to invest in talent development and leadership programmes to attract, retain and develop our leaders of tomorrow.

He revealed that the company is working on forming an association that brings together clay manufacturers to provide a prime advocacy for clay manufacturers’ needs, as well as spark the conversation of creating clay products standards.

“Collectively the group will allow for self-regulation, government support, and environmental protection,” he said, adding that the company is in the advanced stages to establish an academy at Kajjansi to equip stakeholders in the construction with the latest construction and roofing technologies.

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