Uganda Clays slowly coming out of its woes
Uganda’s oldest and biggest clay building materials manufacturer, Uganda Clays, though still undergoing financial woes, is slowly coming out of them with a declaration of a profit for the first time in years in FY 2015/16. Uganda Clays, one time a monopoly producer of high quality roofing tiles, building bricks, decorative gullies, ventilation, interlocking and cover blocks, and suspended floor materials among others, is struggling since its near fatal decision to start a second plant in Kamonkoli in Eastern Uganda.
To start the Kamonkoli plant the company took loans from commercial banks and from the National Social Security Fund (NSSF) one of its majority shareholders. The loans taken were not sufficient to complete the Kamonkoli plant, and the expansion therefore turned a white elephant. As a result Uganda Security Exchange listed Clays company stumbled- both on the stock exchange and in the products market.
In its attempt to bounce back to a different market, now saturated by small players, Uganda Clays has agreed with the NSSF to trade its Ushs 26.6 billion (US$7.6 million) debt for equity; meaning NSSF will take more shareholding into the company.
George Inholo , who was hired as CEO in 2015, seems to be getting his formula right with keeping tubs with the cost drivers such as high cost production, personnel and modernizing the plant in Kajjansi etc. He was hired to turn the company around, following several missteps and bad decision made by previous managers that run the company aground.
The Uganda Clays brand though still retains a high credibility and trust for its products among Ugandans, although the market has been highly infiltrated by small local makers of clays materials who provide low grade-cheaper alternatives. Imports mainly from South Africa, UAE, China and Thailand are also on the increase in the local market. On its part, Uganda Clays has made inroads into South Sudan, Rwanda, DR Congo and western parts of Kenya.