Uganda Clays Limited, one of the country’s oldest building materials manufacturers, has reported a net loss for the second year in a row, raising concerns about the company’s ability to rebound in a competitive and cost-heavy market.
The company closed the 2024 financial year with a loss of Shs4.95 billion, up from Shs2.85 billion in 2023.
“This position was primarily driven by a faster-than-anticipated escalation in operational and financing costs,” said board chairman Eng. Martin Kasekende, speaking Friday during the firm’s annual general meeting at Kampala Sheraton Hotel.
He added, “These costs outpaced the modest growth in revenue.”
Interest expenses alone nearly doubled — from Shs1.8 billion in 2023 to Shs3.2 billion in 2024 — largely due to the full 12-month accrual of notional interest on a loan from the National Social Security Fund (NSSF).
Despite the losses, Kasekende said there were signs of resilience. Total revenue ticked up slightly, reaching Shs31.6 billion, up from Shs30.4 billion the previous year. However, gross profit declined to Shs8.2 billion, from Shs8.6 billion in 2023.
Still, the board says a long-term turnaround is already in motion.
“There is light at the end of the tunnel,” Kasekende said. The board has approved a 10-year strategy focused on what he described as turnaround, repair and aggressive growth.
“Turnaround will focus on stabilizing operations and improving cost control,” he explained. “Repair means optimizing existing processes, investing in automation and skills, and restoring efficiency. Aggressive growth will mean expanding into other building materials and moving regionally across East Africa.”
Managing Director Reuben Tumwebaze said the company has already taken concrete steps, including the installation of a new, fully automated Italian production line at the Kajjansi factory.
“Once fully operational, this line will significantly boost production capacity,” Tumwebaze told shareholders. “We’ll meet the increasing market demand with more efficiency and product variety.”
He described the move as a capacity expansion initiative, meant to secure and grow the installed output of the company’s two plants.
“We’ve done aggressive expansion in the clay business,” he said. “We activated a new tile line that will increase our production at Kajjansi by 85,000 tiles per day.”
Currently, the Kajjansi factory produces 25,000 tiles, and Kamonkoli produces 10,000 — a total of 35,000 tiles per day. The new line will raise output to 120,000 tiles daily, Tumwebaze said.
He said the new setup would be “highly automated and very efficient,” with quality improvements driven by upgraded molding and drying systems. Parts of the kiln have already arrived, with the rest expected early next year.
The company is also looking to cut brick production costs by more than half. Currently, a Uganda Clays brick sells for about Shs1,500, compared to Shs500 on the informal market.
“The Shs1,500 is high,” Tumwebaze admitted. “Our competitors on the roadside sell a brick at Shs500.”
He said the new high-capacity brick line would produce bricks at around Shs700.
“Very good,” he said. “You use it and don’t need to plaster the wall. Everybody will be able to manage that.”
Tumwebaze said these two major projects — the new tile and brick lines — could lift annual sales revenue to above Shs100 billion.
“That,” he said, “will drive profitability.”
