Hima Cement is set to invest $100 million (about Shs17.5 billion) in the expansion of its plant in Kasese in a bid to boost production capacity.
When complete, the new cement production line will be as big as that of the mother plant in Kenya and will be among the largest in Africa.
The company currently produces 300,000 tonnes of cement per annum and is targeting to increase by another 700,000 tonnes in about two years.
Officials said the expansion plan is a response to the growing demand for their products on the local market and in the region.
"We want to satisfy the increasing demand for cement in Uganda and the entire Great Lake region," said Mr Ken Lubega, the company’s commercial manager last week.
He was speaking to a delegation of 27 leaders from Kamwenge District who were on an environmental impact assessment tour of Bamburi Cement factory in Mombasa.
He said the money will be spread into the procurement of machines, and other operational costs.
More than 4,800 residents will also benefit from the project in terms of employment. Some 800 will be recruited, as employees while the rest will be contracted to work in the new factory.
The expansion plan comes on the heels of a recurrent cement shortage that has lasted for the past 13 months and seen prices soar by over 25 per cent.
Industry players have attributed the shortage to the massive physical constructions going on in the country and the rising demand from the neighbouring countries such as Southern Sudan, DR Congo and Rwanda, among others.