[2008-06-16]  Uganda Clays eyes South Sudan market
UGANDA Clays Ltd (UCL) has announced plans to set up an outlet in Juba, South Sudan as the company positions itself for regional expansion.

“We sent a team of marketing people to Juba early this month led by the marketing manager who had gone to operationalise an outlet in Juba. When we planned the new Kamokoli factory, we had South Sudan in mind,” said John Wafula, the chief executive officer.

He also confirmed that the building materials firm was in talks with an unnamed company about a take-over.
“At the moment, we are in discussions to take over one of our competitor’s business.

“We are already negotiating and conducting due diligence to see whether we can take over their business, but it’s too early to give names,” Wafula said.
Some of UCL competitors include African Clays, Pan Tile and Brick Centre, Clay and Allied and Lweza Clays.

The launch of UCL’s new plant in Kamonkoli in eastern Uganda later this month, and the acquisition talks signal the company’s new aggressive strategy to consolidate its market leadership position and forays into the region.

The first phase of the new factory is expected to supply the local and regional market with an annual capacity of 80,000 to 100,000 tonnes per year. UCL churns out 50,000 to 70,000 tonnes of products per annum.

“We are looking at expanding to 150,000 tonnes per annum in the next three

He projected sales turnover to reach sh17b this year, up from sh11b last year.
UCL has so far been sheltered from the global downturn, Wafula said.

“The global downturn came at a time when we had a mismatch between supply and demand so we will not be affected.

“The slump found us with excess demand so when the boom comes and demand increases, we will have enough supply from the new factory,” he asserted.

He said UCL was under pressure from shareholders and brokers to do a share split. UCL’s share price is hovering above sh10,220.

The company did a share split in November 2006 after the share price hit sh22,000 at the stock market.
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