chairman's speech uganda baati agm 09-05-2012
TRANSCRIPT
CHAIRMAN’S SPEECH
Uganda Baati – Annual General Meeting, 09 May 2012
Dear Members, Ladies and Gentlemen,
It is with immense pleasure that on behalf of the Board of Directors, I have great
honour in welcoming you all for today’s Annual General Meeting for the year
ended 31 December 2011. Indeed, it is my privilege to have your presence to
deliberate and review the excellent performance of the Company for the year
2011.
Uganda Baati Limited is a member of the SAFAL Group Of Companies – the
largest producer of steel based roofing products in the Eastern & Central Africa
region and the leading manufacturers of Roofings products in Africa.
Uganda Baati today employs a self motivated work force of 312 staff in an
industrial complex that covers over 4.561 acres of production facilities, ware
houses and offices in Kampala’s Original Industrial Area.
1. UGANDA’S ECONOMY
The Ugandan economy remained resilient despite bouts of both domestic and
external shocks. After declining to 5.9 percent in 2009/10, largely on the
backdrop of the global economic crisis, the economy slightly recovered in
2010/11, with real GDP growing to 6.7 percent. This growth was registered
despite the dismal performance of the agricultural sector, which was adversely
affected by drought.
The combined effects of high food prices due to drought, the euro zone financial
crisis and high global fuel prices rapidly escalated Uganda’s inflation from 5.6% in
January 2011 to 30.8% inflation at close of the year. Correspondingly steep rise in
interest rates to 30% precipitating dearth of credit
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The exchange rate of USD has been quite volatile during the year 2011, it begun
at the level of Ushs 2,300 at the beginning of the year, crossed 2900 level in
Sept. 2011 and finally closed at the Ushs 2,490 at end of the year.
The outlook for Uganda’s growth in 2012 remains broadly optimistic. Uganda
looks set to enjoy the fruits of its high level of economic liberalization and
ongoing improvements in regional integration. Demand from Southern Sudan in
particular will continue to provide an important boost.
Uganda’s real gross domestic product (GDP) growth rate is projected to increase
to 6.9% in 2012 due to increasing regional export demand and the improved
global outlook. Macroeconomic indicators continue to be stringently managed
and this may lead to slow down in the broad economy.
At a global level, overall, in 2011/12, the policymakers face a much more
complicated situation that is rapidly turning into a systemic crisis. First, the
European sovereign-debt problem and the toxic combination of a sudden
economic slowdown, potential interconnectedness between the slowdown and
the financial risk, and an absence of obvious solutions to these problems
constitute an alarming signal of systemic risk.
Uganda, being a small open economy is exposed to developments and prospects
in the global markets. The current global economic outlook threatens the
economic stability of Uganda at the same time as it provides it with
opportunities. The slowdown in global recovery implies slower export growth for
Uganda, with implications for the overall economic growth.
The government’s commitment and investment in infrastructure development as
well as progress in the local oil industry present strong indicators for envisaged
growth.
The company continues to develop depth and robustness in its business models
with a view to enhancing its market share.
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2. PERFORMANCE OF THE COMPANY DURING THE YEAR
I am delighted to report on excellent performance of the company for the year
2011 as it has made record profit since its inception in 1964. Sales value rose by
around 49.63% from Ushs 140.221 billion in 2010 to Ushs 209.811 billion in 2011.
However, better pricing & marketing strategies resulted in huge jump in
Operating Profit from Ushs 12.986 billion in 2010 to Ushs 24.145 billion in 2011 ,
consequently Profit before tax also increased by 220% from Ushs 7.786 billion to
Ushs 24.922 billion over the same period. Profit after tax stood at Ushs 16.384
billion. The Company Total Assets increased from Ush 67.511 billion in 2010 to
Ush 90.973 billion in the current year 2011 representing a growth of 34.75%.
3. CORPORATE SOCIAL RESPONSIBILITY
At Uganda Baati, we strive to take responsibility for our actions and promote
ethical business practices, support the development of our communities and
ensure to minimize the impact of our business on the environment.
During 2011, Uganda Baati continued with Corporate Social Responsibility (CSR)
initiatives categorized into four themes: Economy, Society, Environment and
Governance.
CSR highlights for 2011 include;
Continued support by Uganda Baati of Chandaria Medical Clinic so as to
provide quality health care services to individual workers and the
surrounding community in a caring and competent environment.
Cervical cancer vaccination and screening for all female staff of the
company in partnership with GlaxoSmithKline and Uganda Women’s
Cancer Health Initiative.
Provision of roofing material to schools in Sembabule and Wakiso districts.
In partnership with Uganda Health Marketing Group (UHMG), the company
made a financial donation to support the malnourished children in
Namutamba district.
To crown it all, Uganda Baati was recognized by Uganda Chapter on
Corporate Social Responsibility Initiatives for her CSR efforts.
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4. NEW DEVELOPMENTS
Purchased Namanve Land around 20 Acres worth of 7.752 Billion
Purchased Tororo Steel Assets worth of Ush 6.240 Billion
Proposal for Expansion of Manufacturing Activities under Study & being
finalized.
5. FUTURE OUTLOOK
The future of the company seems to be very bright and strategy towards
sustainability have been formulated and partly implemented to increase more
sale volumes. Our business strategy remains focused on:
Gearing the entire organization to provide exemplary service to the
customers.
Introducing high quality Roofing sheets and associated products.
Cost reduction so that the products of your company remain affordable.
Specific targeting of export markets of Rwanda, Burundi, Democratic
Republic of Congo and Southern Sudan.
Introducing new products to provide complete basket of products to the
customers.
6. DIVIDENDS
It has been a very good year in terms of financial performance as the company
has made record profit since 1964 and already paid an Interim dividend of Ush
4.567 billion during last year. Now a final dividend of Ushs 10,000 per share has
also been proposed for the year ended 31 December 2011.
7. ACKNOWLEDGEMENT AND APPRECIATION
Finally, on behalf of the UBL Board, it is my great pleasure to thank all our
esteemed customers, suppliers, Banks, Government & its agencies and all other
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stakeholders for their continued support, partnership and contribution to our
successful performance in 2011.
I particularly wish to thank our management and staff for their drive and
dedication for successful & excellent performance of the company since 1964.
The Directors have given their valuable expertise and experience to the affairs of
the company. I thank them all for their personal commitment and direction. I
would also like to thank you all shareholders for your support and confidence in
the future prospects of Uganda Baati. We hope to exceed your expectations in
2012 and look forward to further success in the coming year.
Thank you,
__________________________________________________
Chairman
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