Metro Cement wins gold as tax changes raise production costs

Metro Cement Uganda Limited has been named the Gold winner for Best Cement Manufacturer in Uganda at the Business Excellence Awards 2026, an achievement the company says reflects its growing contribution to Uganda’s industrialisation drive.

The award was presented at the Sheraton Hotel Kampala, bringing recognition to Metro Cement at a time when the company is expanding production capacity while navigating rising input and taxation costs in the cement industry.

Receiving the award, Shamil Razack, Group Director at Metro Cement, described the recognition as an important milestone for the company and a confidence boost for its international investors.

Razack said the award demonstrates the progress made by the company in strengthening its presence in Uganda’s manufacturing sector and supporting the country’s ambition to increase domestic production and value addition.

However, he noted that the operating environment remains challenging, particularly with changes in taxation affecting the cost of production.

In an interview after receiving the award, Razack said the proposed UGX 250 increase in excise duty on cement introduced by Government in July 2026 adds about UGX 5,000 to the cost of producing a tonne of cement.

He said increased taxation could put additional pressure on manufacturers, although competition among cement producers could help improve efficiency and give consumers greater choice.

“But when many brands are available in the market, it is good for industry standards because consumers have more options to choose from, while competition can also help make pricing more affordable,” Razack said.

Expansion and local sourcing

Metro Cement is also expanding its production operations, with a new production line in Mbale expected to strengthen its manufacturing capacity and ability to serve Uganda’s growing construction market.

The expansion is expected to increase the company’s demand for locally sourced raw materials, particularly clinker from Moroto.

Razack said local clinker sourcing from Moroto could increase exponentially as the company expands, provided competitive prices prevail.

The increased use of locally sourced raw materials could deepen domestic industrial linkages and create opportunities for economic activity in mineral-producing regions.

For Uganda, strengthening local production and value addition remains a key component of Government’s broader economic transformation agenda.

Government’s industrialisation strategy seeks to encourage investment in manufacturing, create employment, expand the tax base, reduce dependence on imports and increase the value of locally available resources.

Policy support needed

Razack said the cement industry requires a supportive policy environment to enable manufacturers to invest, expand capacity and remain competitive.

The company’s concerns come as Government pursues its long-term development ambitions under Vision 2040, alongside the targeted transformation of Uganda into a US$500 billion economy.

The construction industry is expected to remain a major driver of cement demand as Uganda invests in roads, energy infrastructure, housing, industrial parks and other development projects.

For manufacturers, however, the ability to take advantage of this growing demand will depend on production costs, taxation, access to affordable energy and raw materials, infrastructure and market competition.

Metro Cement’s Gold award therefore comes at a significant moment for the company—celebrating an industrial milestone while simultaneously confronting the cost pressures that could influence the competitiveness and expansion of Uganda’s cement manufacturing sector.

As the company scales up its Mbale operations and considers greater use of locally sourced clinker from Moroto, the balance between industrial taxation, consumer affordability and support for local manufacturing is likely to remain central to the sector’s growth.