Quality Chemical Industries Limited shareholders voted in favour of the pharmaceutical company’s $51m (Shs182.7bn) credit facilities provided by Stanbic Bank that will help it increase manufacturing capacity and introduce new products.
In a statement posted to the Uganda Securities Exchange, the company said it had received approval for a deal with Stanbic Bank Uganda to borrow $36m as a term loan and $15m as a working capital facility.
Quality Chemical Industries said the long-term loan facility would fund the construction of a second factory while the working capital facility would be used for “operational purposes”. The company did not give further details on interest rates, the duration of the loan agreements, and other conditions.
The company exports pharmaceuticals to 14 African countries and has regulatory approval in 31, supplying anti-malarials, antiretroviral medications, and hepatitis B treatments. Uganda is its biggest market, however, with local sales accounting for 75.9 per cent of its revenue in the year to March 2025.
“The company plans to construct a second factory as part of its future expansion. This expansion aims to enhance production capacity to meet the growing demand for its existing range of medicines, and is also intended to support the company’s entry into new therapeutic areas, including tuberculosis and sickle cell anaemia,” said Quality Chemical Industries in its annual report.
The new factory, whose construction is scheduled to begin in the second quarter of the 2025/26 financial year — the company’s financial year ends in March — will enable Quality Chemical Industries increase its annual manufacturing capacity from 1.4 billion to 2.4 billion tablets, according to the report.
It added: “In line with evolving patient treatment preferences, the company will also introduce an injectables line. The company will invest approximately Shs147bn in this expansion plan, financed through a term loan.”
The company has an unsecured overdraft facility with Absa Bank Uganda with a limit of $14.2m and an annual interest rate based on the three-month Secured Overnight Financing Rate, plus four per cent. In the year to March, it paid Shs140.4m in interest on the overdraft, down from Shs272m the previous year when the overdraft limit was $20m. As of March, the facility was unused.
Quality Chemical Industries had Shs35bn in cash and bank balances as of the end of March, down from Shs53.4bn a year earlier. It reported a profit of Shs40.6bn for the year.
