At the recent Annual General Meeting held at Kampala Serena, Rauben Tumwebaze, Managing Director of Uganda Clays Ltd, shared an insightful overview of the company’s performance and future outlook.
He alluded that despite facing significant operational hurdles and market pressures in 2023, Uganda Clays Ltd, a key player in the construction and building materials sector, remains optimistic about its future.
Tumwebaze highlighted that 2023 presented numerous challenges for Uganda Clays Ltd, leading to financial losses. Operational disruptions and market pressures were chief among these difficulties. However, he emphasized that the company’s strong market position, coupled with promising external factors, keeps them optimistic. “Factors such as increased demand for housing, a growing middle class, improved living standards, and a vibrant diaspora community are all expected to drive future growth,” he said.
Tumwebaze pointed out that Uganda’s macroeconomic environment remains favourable, with a GDP per capita of approximately USD 1,200, an economic growth rate of 6.7%, and inflation kept below the central bank’s target of 5%. Despite these positives, geopolitical tensions in Europe and domestic infrastructure challenges disrupted logistics, leading to product shortages and impacting operations.
Reviewing the company’s 2019-2023 strategic plan, Tumwebaze presented a mixed scorecard where successes were noted in business processes and employee engagement, with kiln recovery reaching 79% and a staff engagement index of 71%, both surpassing targets. However, the company underperformed in customer satisfaction and financial metrics, with a net promoter score of 13% and revenue at UGX 30 billion, falling short of the targets of 60% and UGX 31 billion respectively. Nonetheless, Uganda Clays Ltd maintained a positive EBITDA of UGX 3.6 billion, showcasing strong management and financial resilience.
“The year 2023 was particularly tough operationally, with equipment failures and machine breakdowns severely affecting production. The average product delivery turnaround time increased from 3 days in 2022 to 45 days in 2023, resulting in decreased customer satisfaction. The net availability index (NAI) of machines dropped to 55%, below the budgeted target of 65%,” he said.
In response, Uganda Clays Ltd commissioned two new tile presses at the Kajjansi factory, which began positively impacting output and monthly revenue in the latter half of the year. The full benefits of these new presses are expected to be realized in 2024. Tumwebaze also addressed increased competition in the roofing sector, with 70% of households opting for iron sheets. To counter this trend, the company introduced incentives like discounts and hire purchase schemes, which have been well-received, as detailed in the company’s sales and marketing commentary.
He also revealed that despite the operational challenges, Uganda Clays Ltd improved its industrial safety rating to 67% in 2023 from 53% in 2022. “There were no reported fatalities, and the company enhanced the use of personal protective equipment, making factories safer for employees and visitors.”
Furthermore, the company successfully obtained mining permits and secured a waiver to excavate the Nsaggu quarry. It also achieved environmental compliance with a NEMA certificate and an audit report from Morando. Payments for the Italian tile line are nearly complete, ensuring a smooth setup of the equipment arriving from Italy.
He also expressed heartfelt gratitude to customers, shareholders, and stakeholders for their unwavering support during a challenging year. “Uganda Clays Ltd exists because of your support,” he emphasized, acknowledging the board, the executive committee, and all staff for their resilience and dedication.
The company remains committed to its slogan, “Beauty to last!” and aims to continue supporting its customers, developing its employees, and delivering sustainable growth and value to shareholders and stakeholders.
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