Construction Sector in Uganda: Ready-Mix Concrete and Drilling Solutions by Kasthew Group

Interview with Mathias Kasujja, CEO of Kasthew Group

What is your assessment of the construction sector? What are the latest trends? Is the sector competitive?

The construction sector in Uganda is booming. Uganda is a developing economy and people are trying to start a lot of construction – industrial, commercial, residential. The people that are planning to come into the sector will get good returns. In the ready-mix concrete part of the sector, it is less competitive but still booming. It is a new technology in the country, unlike other parts of the world. In Uganda, we have every few players. We have only 4 to 5 suppliers of ready-mix concrete. Contractors in the country are trying to embrace the technology. It is the way forward for this sector. It is a good business and people are trying to catch up with the trend.

What is the other solution?

If you do not use ready-mix concrete in your construction, the other option is the local way of mixing concrete on site. It is time consuming and there is a lot of waste of both materials and time. The reason why we came up with this idea was to minimize wasted time on site. Concrete is mixed with a machine so you know how many cubic meters of concrete you need on a particular project and the computer calculates that automatically. In one hour, you could cast a slab over 200 m³ of concrete which is not possible with the traditional method.

What are your competitive advantages? How do you attract customers to this new product?

We have the best equipment in the country for ready-mix concrete. Our location in the city is also an advantage. It is easily accessible to many sites. Many other players are 20 to 40 km outside of the city. We are also a locally owned Ugandan company.

What is your assessment of the water drilling sector? Is it competitive? What do you offer?

Our dream as a company is that by 2025, we will have tripled our income. We make sales of about 10 million USD currently. In the next five years, we hope to be making 30 million USD or more.

Kasthew Group has a subsidiary called Kasthew Drilling which does water drilling, explorational drilling – ROC and diamond drilling – and Geotech drilling which is basically for soil sampling purposes. The water drilling arm is good for us because we have a good market and there are few players. Of the few players that are within the country, 90% are foreigners. Many of them are Indians. Being locals from within the country has helped us to build more. We have been able to utilize the marketing strategies and platforms that are available online, through newspapers in the country, TV stations, etc., for advertising. The Indian companies here, for instance, and many of our other competitors do not advertise. The demand is also huge. About 70% of Ugandans do not have access to clean and safe water in the country. There is no piped water in many areas of the country. We offer a solution because we drill water in areas where there is no national water and then we pump this water into people’s homes with motorized pumps, solar pumps, and hand pumps. It is a good business and I would encourage other players to come onboard.

What is one of your success stories?

I am happy to be engaged in a business that is changing lives. One example is of a local district in Uganda where only 5 to 10% of the locals in those communities have access to clean and safe water. We are planning a project for one month from now where we are pledging more than 100 hours to help hundreds of thousands of people within communities in that district by providing them with clean and safe water. In the past, people would have to walk one to four km just to get 20 L of water. My company being engaged in such life changing activities makes me proud.

What are the challenges in the construction sector as a whole? What is your competitive advantage?

In the construction sector, you need to have everything that the clients need. Clients here do not want to burden themselves with employing someone to do the supply of concrete and then a different contractor to do the building, etc. You need to be self-contained. What gives us a competitive advantage is that we supply our own concrete, we do our own construction, we do everything ourselves. We do not have to subcontract, which is what many other contractors here do. If we can supply the concrete, do the construction, have our own equipment, have our own engineers, have our own manpower, then we are in a very good position.

What is your international reach?

We have international partners from China, India, South Africa. We do not only handle projects from Uganda. We also do work in Tanzania, South Sudan, DRC, Kenya, Burundi. Our scope is East and Central Africa.

What is one of your international projects?

In DRC, we are engaged in road construction projects, water projects, Geotech works, and explorational drilling because there is a lot of mining there. In Kenya, we do Geotech drilling as well. In Rwanda and Burundi, we do mainly water drilling and construction. In Uganda, we do everything. The concrete arm of our business is mostly in Uganda, primarily due to distance. We are trying to develop mobile mixer plants so we can also cater to the rest of these countries for ready-mix concrete.

Are you interested in attracting investors?

We are open to investors and partners. That is one thing that has helped us to grow quickly. You cannot do it alone, especially in the construction sector. Uganda is a growing economy and there is a lot of potential for the market here.

What do you want to develop in the company?

We have our own structure within Kampala as well as our own equipment. That has been an achievement that many contractors have not been able to accomplish.

Project yourself two to three years in the future, the medium term. What do you want to achieve for the company?

Our dream as a company is that by 2025, we will have tripled our income. We make sales of about 10 million USD currently. In the next five years, we hope to be making 30 million USD or more. We hope to have more equipment secured for the company. We hope to have more staff for the company. In terms of projects, our plan is to expand. Our scope is East and Central Africa now, but there is still a market in West African and South African countries. Our ambition is to expand into these areas.

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