By Umaru Kashaka
Given the requirement that Uganda Development Corporation (UDC) should be a profit making body, UDC is to undertake a due diligence of Phoenix Logistics Uganda Ltd (PLUL) after it made accumulated losses of over sh21b since its inception in 2000, the state minister for Trade and Industry, David Wakikona, has said.
Appearing before the trade and industry committee of parliament over his ministerial budget framework paper for 2014/15 financial year, the minister said the due diligence report would be able to make objective recommendations concerning the future of PLUL.
“Cabinet in May 2013 directed that all enterprises where Government has interests should be transferred to UDC. This, however, awaits the passing of the law establishing UDC after the 1952 UDC Act was repealed,” Wakikona further told the committee chaired by Lyantonde Woman MP, Grace Namara.
He said in September 2010, the shareholders authorized acquisition of more shares by Government of Uganda to 94%. However, the resolution was not registered due to lack of sh64m as stamp duty.
This was in response to the committee’s question about the status of PLUL and why Government was continuing to inject huge sums of money in PLUL when it’s making losses.
“Why do you continue to put money in a sinking boat and yet there are projects out there that would absorb these funds?” Makindye East MP John Ssimbwa asked.
Phoenix Logistics is the only company in Uganda that specializes in the manufacture of high quality textile garments from cotton knitted and imported woven fabrics.
These products, marketed under famous brand names such as Yamato, Zenbury, Phoenix, and Crocodile.
Phoenix Logistics’ future hangs in balance