Kampala – The year was 2020 when Uganda Clays limited posted a UGX1.4bn financial loss in net profits which was deeply attributed to the covid-19 pandemic economic ripple effects that set foot in the country in March.
But the story is different this year as the securities exchange-listed company embarked on a robust plan to recover from the loss posted year ending 2020, which has seen them regain their financial footprint during the pandemic which is here to stay according to health experts with the tagline “the new normal.
Speaking at the announcement of the half-year performance report for the period ending 30th June 2020, Ruben Tumwebaze attributes the shs2.75b turnover on three pillars i.e. increase in volume, reduction in operational costs and revenue growth. “
Tumwebaze also further revealed that, unlike other entities that were affected by the 42-day covid-19 imposed lockdown, the company remained stayed production at 100% capacity and recorded the high sales during the same which says: “It means that Ugandans are beginning to refocus their resources, planning, investments in those areas that are resilient and firm enough despite the shock within the economy,” he said.
Jones Muhumuza; the head of finance at the company when asked by this reporter to expound on the three pillars that drove the high turnover up from the last year’s loss, he had this to say: “The drivers are increasing in volume, reduction in costs. The increase in volume has come from increased production as a result of increased efficiencies. When we talk about the recovery of moving from 55-90% recovery what we are trying to say is that wastage has reduced from forty-five per cent to 10% and the strategic target for 2023 is five percent using the old kiln technology.”
Muhumuza further said that the company’s distribution channels have been boosted through an increased footprint in the country with 15 agents countrywide culminating in 100% presence. Costs have been also reduced through strengthening the company’s financial planning and analytics (FP&A) by analyzing all the costs among which includes using alternative sources of fuels like coffee husks and saw specks of dust, and also streamlining transportation all toppled with ensuring that there is working capital, according to him.
At the same function, the MD also revealed that in the near future, the company plans to increase volumes by six times up from the combined total production of 950,000 roofing tiles per month currently produced from both the Kajjansi and Kamonkoli plants in order to meet the 40m million roofing tiles per year target by 2023, besides other products that the company also produces like floor tiles and max pans.
On the regional outlook, Muhumuza said that they are expanding their markets beyond Uganda like venturing into the East African community market.
“ We don’t believe we have any better competitor not only here in Uganda but in the region and one year from now, the story will be different.
The Managing Director conclusively rallied the public to buy shares in the company as it is a profitable form of investment with assured returns; the company’s shares currently sell at shs8.5 per share on the Uganda securities exchange with some experts opining that it is way lower compared from the gross profits annually posted, and also it is a vibrant public company and a locally innovated business, among other reasons.