Building materials maker, Uganda Clays Ltd (UCL), said on Tuesday that it expects its cost to fall by up to 40 percent in 2015. Managing Director, George Inholo, said a switch from imported oil to cheaper local biofuels for the company’s furnaces will help reduce the cost of manufacturing.

Costs rose by 22.8 percent last year, according to Reuters news agency, causing a loss of 4.5 billion shillings ($1.65 million) for the company. Inholo is quoted as saying that a threefold surge in the price of heavy fuel oil since 2010 and frequent power outages undermined performance. The heavy losses meant the company needed to find a cheaper and efficient source of energy to survive, let alone grow.

And George Inholo, who took over as managing director in August, said the answer lies in biofuels. “We have fully converted to coffee husks and other biofuels,” he told Reuters. He also pointed to electricity bills that would be reduced by shifting to production at off-peak hours. “This will reduce the cost of production significantly by about 30 to 40 percent next year,” he said. He added that the lower costs would help the company to resume dividend payments in 2016 for the first time since 2008.

Inholo says he expects revenues to grow by 5 percent in 2014, from the 23.1 billion shillings ($8.47 million) earned last year.

UCL manufactures roofing tiles and other product. Its assets are worth about 71.4 billion shillings ($26.18 million).

Inholo told Reuters that UCL’s performance has also been hindered by interest payments on a 11.1 billion shilling ($122 million) loan from its largest shareholder, Uganda’s state-run National Social Security Fund (NSSF). NSSF was seeking to convert that loan to equity, he added, although another shareholder was challenging the move in court.