Five decades of growing a metal casting business

When the late John Lugendo planned to own and run a foundry more than decades ago, he could not have envisaged that his company would reach the milestone of 50 years in business.
Being an ambitious young man, it did not take long for him to get started in the foundry business that currently generates an annual turnover of between Shs300 million and Shs500 million.
The opportunity knocked in the 1960s when the late Lugendo who passed away recently, started the little known Ndeeba based ‘John Lugendo and Company Limited.’
The company that was registered in 1962, started off as a welding shop, before graduating into a foundry, manufacturing the otherwise expensive imported industrial spare parts. For John Lugendo and Company Limited, scrap is a lucrative commodity, turning in considerable revenues after scrap is melted with other bits of steel and converted into scrap metal for various companies. Today, the company is worth Shs1 billion.
The company started manufacturing spare parts in the 1960s and 70s, following the expulsion of the Asians from Uganda. Some companies included: Dairy Corporation, Tumpeco Uganda, the Sugar and tea factories and other factories.
“My dad trained from East African Railway School in Nairobi and when he returned, most workshops were dormant. So, together with some Asians, they managed to revive the sector and he got an idea to start his own business,” he says.
He observes that the expulsion of the Asians in the 1970s was inaertently a big boost for the factory because it started bridging the gap left by Asians who used to assemble agricultural machinery such as maize mills and coffee machines.
These were being imported by Gailley and Roberts who eventually contracted them to start assembling them here. In the process, they learnt how to fabricate the imported machinery which they are now manufacturing in Uganda.
“I do not have an idea of the initial investment into the factory but during the economic war, most agro-based factories did not have spare parts which we started making here,” he says.
Following in his father’s footsteps, David Bukaalamye, the general manager and first born to the late Lugendo, is training the third generation of the family for the business’ continuity.

Experience gave him an edge
According to him, the expertise gained over the years has enabled them establish coffee, tea and sugar factories. Now, they can manufacture machinery for any cottage industry, including machinery for all maize, coffee and sugar cane processing, rice machinery, grading maize, mixing feeds, crushing nuts, cutting chuff and multi-purpose mills.
Other equipment they manufacture include wood processors and foundry products fabricated from cast iron, brass, copper, bronze and white metal. Other innovations support the handling of pork and beef products.
“We derive our biggest support from the foundry which can melt 600 Kilogrammes a day and it helps us fabricate any machine from which we can pick up any idea,” he boasts.
Mr Bukalaamye says as a result of the experience, he has trained in several foundry courses.
“I teach Makerere and Kyambogo university students. I have trained NGOs in aluminum and cast iron works. Currently, we have a World Bank programme where I am the master trainer. University students come here for internship from nearly seven universities in Uganda every year,” he says.
The raw materials used include scrap used engine oil which is used as furnace oil, electricity to melt metal, sand to make molds, then they pour the liquid metal in the molds to get the needed spare parts.

Market
Most of their clients come from Northern Tanzania, Rwanda and Democratic Republic of Congo to purchase multi-purpose mills, groundnut paste makers, sheer nut butter machines as well as those for white coffee which processes wet coffee to remove husks and is now gaining popularity in Kasese and Bugisu.
Among their biggest clients is Uganda Railways Corporation for whom they recondition and maintain the damaged railway slippers.
The local companies they have served in Uganda include Uganda Clays, Pan Kajjansi Clays, Roofings Rolling Mills, Sembule Rolling Mills, Kakira Sugar Works and the Uganda Metal and Allied industries in Lugazi before they started their own foundries.
He also boasts that companies like the Uganda People’s Defence Forces’ industries in Luweero, always consult them whenever they need to fabricate complicated components.
“We make competitive products which are currently beating those coming in from India and China. We do carpentry, motor rewinding, welding machines and at times, we make motor vehicle parts. We were part of the team which manufactured the Kiira EV of Makerere University,” he says.

Money earned from top deals
The most memorable project was the deal with Rift Valley Railways three years ago when they rehabilitated the railway slippers, earning Shs50 million. The other good clients are Serena Hotel and Kajansi clays. The company incurs Shs8 million on monthly operational costs where they employ 20 permanent employees. But depending on the volume of work, they get casual labourers.
One of his biggest achievements has been operating a self-driven business. He says much as the inputs are expensive and sophisticated, his business is not supported by government.
“Previously, power scheduling was a problem but now it is the tariffs killing us. Secondly, government should not allow investors to bring everything here because then who will be responsible for their quality and quantity,” he quips.
He notes that much as government liberalised the market, there is need to protect the sector because in India whenever investors go, they must ensure that there are avenues in the organisation through which local people learn how to manufacture the commodities they are making.
“Most of our products are more competitive than those imported from India and China. During the UMA exhibition last year, we beat Italian, Indian and Chinese products in the machines category. The same thing happened in Rwanda and Burundi as well, beating other competitors,” he says.

Opportunities
He notes that their biggest achievement which Ugandans have not tapped into is the innovation of seed cleaning technology for coffee, ground nut, sun flower, rice, soya and sim-sim, among others, through a combination of machines which do winnow stones and grade seeds according to their size.

Future plans

Expanding the factory to melting steel is one of his future plans.
The Ministry of Trade and Industry which has ordered for juice extractors from them because they fabricate parts from the ones which were supplied for repair.
“We make equipment that suits our conditions. Coffee machinery, for example, differs in sizes because of the different coffee bean sizes from region to region. Even the sludge machines differ because of the different grass types,” he explains.
He says his company does maintenance of laundry, kitchen and all air conditioning at Serena hotel.
Bank of Uganda also approached them to fabricate spare parts for their lift when it was imported with wrong equipment.
He also says if government hospitals had independent decision making processes like the private ones, most of them would be in good shape because more than 70 per cent of their furniture and fittings involve metal work which their foundry can manufacture locally rather than importing them.

Aice

Any upcoming entrepreneur should have knowledge about the business he or she intends to undertake and ensure their staff is trained to keep them abreast with business trends.
He believes most of the people involved in the foundry business in the country have been incubated from their foundry.
“The problem with Uganda is copying. Entrepreneurs should stop gambling and acquire knowledge on whatever they are doing.”

The numbers

20
Number of people employed by John Lugendo and Company Limited

600 Kg
Daily production capacity of the company

Shs8 million
Amount of money the company incurs in operational costs

Shs400 million
Average amount of annual turnover

Shs1 billion
Worth of John Lugendo and Company Limited

sotage@ug.nationmedia.com

SOURCE: Daily Monitor

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