Business
Uganda Clays applies for its own industrial power
UCL’s tile output that stood at 31,800 tonnes last year, is expected to rise sharply as the company enhances its production capacity. Photo/ANTHONY KAMAU.
Posted Monday, March 15 2010 at 00:00
So far, the company has secured 150 acres in Kamonkoli for clay reserves projected to last 50 years and spent Ush185 million ($89,849) on securing new leases for clay reserves in the region surrounding the Kajjansi plant.
Though the company has increased output over the last five years as a result of accelerated demand in the construction sector, limited gains in efficiency have led to hidden costs and reduced profits.
Uganda’s construction sector has grown by over 10 per cent since 2006 leading to increased pressure on local suppliers of clay building materials, cement and timber to boost capacity and meet the surging market demand for both domestic and regional markets.
Significant investment in expansion has seen UCL’s tile output grow from 15,900 tonnes in 2008 to 31,800 tonnes in 2009.
Production losses are now estimated at a minimum of 10 per cent per day, at the new Kamonkoli plant and 14 per cent at the Kajjansi plant.
Mr Rubaijaniza said the company intends to slash these losses by 10 per cent and 5 per cent respectively in two years’ time.
UCL registered an after tax net profit of Ush2.2billion ($1million) in 2008 but paid no dividends because of considerable debt repayment pressures.
It is also the oldest listed company on the Uganda Securities Exchange having debuted in 2000.
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