A US$2.5mn loan agreement has been signed between Uganda Development Bank (UDBL) and the Japan Bank of International Cooperation (JBIC) in order to support the growth of a cotton manufacturing plant.

The funds will be granted via UDBL to Phenix Logistics, a locally incorporated Japanese affiliate, to finance the expansion of its cotton plant in Kampala.

Phenix Logistics began to sell cotton products made from Ugandan grown organic cotton in 2001, mainly targeting the Ugandan market. However, one of the key concerns of the Ugandan government over the last few years is the need to ensure the country’s manufacturing industry develops a competitive edge for the international market. This has led Phenix to increase its capital investment in manufacturing facilities to expand exports into overseas markets.