Kasekende (middle), Tumwebaze (right) during the UCL Annual General Meeting.Uganda Clays Limited (UCL) has posted a net loss of UGX 4.95 billion for 2024, deepening from UGX 2.85 billion in 2023. Despite this downturn, the company is placing a calculated bet on a 10-year strategic overhaul to stabilize its operations, modernizing its plants, and expanding across the East African region.These losses, were attributed largely to soaring operational and financing costs. But while the financial results reflect a company under pressure, the underlying tone from the board and management, indicates optimism and strategic clarity.“We’ve turned a critical corner,” said Eng. Martin Kasekende, UCL Board Chairman.“We’re not simply reacting to the losses. We are executing a structured, future-focused plan that lays out exactly how we will recover and grow.”He adds that the sector has potential, but it’s also facing stiff headwinds, and these losses are not the end of the story, but part of a reset towards long-term value creation.From the company’s annual report, revenue grew modestly from UGX 30.4 billion in 2023 to UGX 31.6 billion in 2024, reflecting stable demand for clay tiles and bricks. However, gross profit declined slightly to UGX 8.2 billion, down from UGX 8.6 billion, attributable to the soaring operational and financing costs, with interest expenses jumped from UGX 1.8 billion to UGX 3.2 billion, primarily due to the full-year accrual on a UGX 20 billion loan from the National Social Security Fund (NSSF).As the NSSF loan remains a sticking point, UCL had hoped for a conversion to equity or a waiver, but Parliament’s intervention halted that possibility. Nonetheless, the loan has since been restructured to ease short-term pressure, and discussions around external equity partnerships are ongoing.“NSSF loan remains a noose, but not a dead end,” Kasekende explained. “We’re already in talks with potential partners to offset our NSSF obligations through equity. Our performance has begun to turn, and serious investors are taking notice,” he said.This scenario isn’t unique to UCL. Uganda’s construction sector is experiencing mixed fortunes, whereas public infrastructure projects and urbanization are spurring demand for quality building materials, high borrowing costs, (averaging above 18%), currency fluctuations, and post-pandemic economic distortions continue to squeeze manufacturers particularly those reliant on heavy capital and imported machinery, like UCL.“We are confronting these challenges with a structured and forward-looking plan,” said Mr. Reuben B. Tumwebaze, Managing Director. “We’ve begun implementing a 10-year strategy grounded in operational excellence, automation, and market expansion.”The strategy which is now under implementation, lay a structured roadmap split into three phases: Turnaround, Repair, and Aggressive Growth.Turnaround (2024–2025), focuses on stabilizing operations and re-establishing profitability. Repair (2025–2027) centers on efficiency improvements, automation, and workforce retooling. Aggressive Growth (2027 onward) involves product diversification and expanding into new East African markets.A cornerstone of this roadmap is the modernization of UCL’s Kajjansi and Kamonkoli factories.“Already, 90% of the components for a high-capacity Italian tile production line have arrived at Kajjansi. Full installation is expected by late 2025,” Tumwebaze revealed, adding: “Once operational, the new line will triple production, improve turnaround times, and diversify UCL’s product range to meet the varied needs of Uganda’s rapidly urbanizing population.”According to Tumwebaze, some of the key achievements that have been registered in the past four years include; complete overhaul of production lines at both Kajjansi and Kamonkoli plants, expanding clay reserves from 2.5 acres to over 140 acres, ensuring supply sustainability for the next 30 years, acquisition of new high-capacity extruders and kilns, allowing for the development of specialty bricks and affordable walling products and digitizing inventory systems for faster order fulfillment and logistics efficiency.UCL plans to expand its footprint beyond Uganda’s borders, tapping into growing demand in Rwanda, South Sudan, eastern DRC, and western Kenya regions with similar construction profiles and limited local production of quality clay products. In preparation, UCL is planning to venture into ceramic tiles, granite, and eco-friendly building materials. “We want Uganda Clays to be at the centre of building a modern East Africa,” Tumwebaze said. “From affordable housing materials to premium architectural products, we’re designing for every income bracket.”Alongside physical upgrades, UCL is focusing on staff development, fair compensation, and environmental sustainability. The company now ranks among the more competitively paying manufacturers in Uganda’s construction sector, with active training programs to upskill workers.“The red ink is temporary,” said Kasekende. “What we’re building now is value that will last for generations.”-URNThe post Uganda Clays Embarks On Strategic Overhaul As Net Losses Widen appeared first on Business Focus.