Uganda Clays posts strong performance

Uganda Clays Limited recorded a 24 per cent increase in income generated from product sales and operations in the year 2021, leveraging on a long-term strategy by its board to increase the output and efficiency as well as improve on the quality of their products. The revenue went up to Shs 36.7 billion in 2021, from Shs 29.7 billion in 2020.

This increase in revenue was announced as the company posted its annual performance results at their headquarters in Kajjansi recently. According to Reuben Tumwebaze Byaruhanga, the managing director at Uganda Clays, this increase in revenue can be attributed to a promise the company made to its shareholders in 2020, where it planned to recover from the impact of Covid-19 pandemic.

“Last year, as we talked to our shareholders, we promised that we were going to drive four strategic ambitions: volume growth, market growth, innovation and discipline. We have been able to deliver on this strategy,” he said.

The company also invested nearly Shs 11 billion in capital investment to turn around their plants at Kajjansi and Kamonkoli.

“Kajjansi currently produces between 30,000 and 60,000 tiles per day while our plant in Kamonkoli produces 200,000 to 400,000 tiles per month. But with the expected upgrades, we expect to see Kajjansi grow to 85,000 tiles per day and the plant in Kamonkoli also growing to 800,000 per month.”

The company, therefore, registered a net profit of Shs 5.92 billion, a feat that the UCL board chairperson Marion Muyobo says is a result of a deliberate strategy to increase sales. Net profit went up by 21 per cent from Shs 4.9 billion in 2020. Operating costs, however, increased by 28 per cent to Shs 12.1 billion from Shs 9.4 billion, driven by increased funding of company operating expenditure initiatives because “demand outstripped supply.”

According to Muyobo, Uganda Clays had to invest more into the company to meet the growing demand. Total assets increased by 18 per cent to Shs 74.5 billion due to the purchase of clay deposits and deliberate investments in two plants at Kamonkoli and Kajjansi all aimed at increasing customer engagement to meet supply within and outside Uganda.

“Todate we have ordered two new kilns to be installed here in Kajjansi and we also bought two Mercedes Benz trucks to help with the transportation of finished products to our 15 distribution points countrywide,” Muyobo concluded.

Jones Muhumuza, the head of finance at Uganda Clays, says a robust planning structure within the company has helped to offset most of the challenges that the current inflation crisis in the market has presented to their production process.

“As management, we anticipated it and went into long-term contracts with our suppliers and we are sticking to the prices in the contract,” she said.

Uganda Clays will hold its annual general meeting on July 20 where shareholders expect the strong performance to lead to the payment of a strong dividend.


© 2016 Observer Media Ltd