Quality Chemicals posts record Shs56b profit as expansion gathers pace

KAMPALA | Pharmaceutical manufacturer Quality Chemical Industries Limited (QCIL) has reported its highest-ever annual profit, buoyed by growing regional demand, a broader product portfolio and continued investment in local manufacturing.

The company announced a profit after tax of Shs56.4 billion for the financial year ended March 2026, representing a 38.8 percent increase from the previous year. Revenue also grew by 8.8 percent to more than Shs290 billion, marking the third consecutive year of profit growth.

Speaking at the company’s annual general meeting, Board Chairman Emmanuel Katongole described the results as the strongest in QCIL’s history and said they reflected years of investment in manufacturing capacity and product diversification.

Shareholders approved a final dividend of Shs6.4 per share, bringing the total dividend for the year to Shs16.6 per share.

Katongole said the company had also begun construction of a second manufacturing plant in Luzira, a project expected to double production capacity and enable the manufacture of injectable medicines.

He said QCIL also launched several new products during the year, including medicines for the treatment of sickle cell disease.

Originally known for manufacturing antiretroviral and antimalarial medicines, QCIL has expanded into treatments for non-communicable and infectious diseases.

The company recently completed Africa’s only Hydroxyurea manufacturing facility for sickle cell treatment and introduced 15 new products targeting conditions such as diabetes, hypertension, allergies, fungal infections and bacterial diseases.

The new Luzira plant, financed through internally generated funds and bank borrowing, is expected to be completed within 24 months.

Chief Executive Officer Ajay Kumar Pal said the performance was achieved despite a challenging global operating environment marked by geopolitical tensions, supply chain disruptions, trade disputes and constrained access to financing.

However, the board cautioned shareholders that part of this year’s earnings was supported by one-off income, including the recovery of outstanding payments owed by the Government of Zambia.

It warned that the current dividend should not be regarded as a benchmark for future payouts, citing growing competition, changing procurement patterns, volatile raw material prices and persistent supply chain challenges, particularly for active pharmaceutical ingredients.

Pal also dismissed claims that medicines labelled “Made in India” indicate the company imports finished products for resale. He said the products are initially manufactured in India to test market demand before production is localised in Uganda.

He said the company plans to make sickle cell medicines one of its flagship product lines, citing high demand driven by limited access to affordable treatment across Africa.

Investor confidence in the company has strengthened over the past year, with its share price nearly doubling to Shs136.

In November 2023, Africa Capitalworks acquired Cipla’s 51.18 percent stake in the company before the business was rebranded from Cipla Quality Chemical Industries Limited to Quality Chemical Industries Limited in February 2024.

QCIL currently produces about 1.2 billion tablets annually, exports medicines to 13 African countries and holds regulatory approvals in 31 markets across the continent.

Katongole dismissed suggestions that Cipla exited because of poor business performance, saying the sale was in line with the terms of the original investment agreement.