For the first time in 16 years, Astral Foods, South Africa’s largest poultry producer, has a new CEO.
Chris Schutte, who has headed Astral since 2009, stepped down at the end of January, having reached the company’s compulsory retirement age. He is succeeded by Gary Arnold, formerly chief operating officer at Astral.
In a lengthy feature on Schutte and his contribution to Astral, the Financial Mailpoints out that Schutte was not only the doyen of South Africa’s poultry industry, but had been one of the longest serving CEOs of any company listed on the Johannesburg Stock Exchange.
In the interview, Schutte outlined the policies that have led to Astral’s success. They come down to producing affordable chicken through research on and investment in the genetics of its chickens; ensuring the best feed, which accounts for 70% of costs; and don’t diversity – focus on poultry alone.
“If you take focus off this thing for a moment, then you burn. It’s 2½ years of planning ahead. One mistake has a huge knock-on effect.,” he told the publication.
Apart from its operation in Zambia, which is performing well, Astral has avoided expanding into other African countries, believing the political and economic risks are too high.
Schutte stressed the importance of correct feeding for the company’s 40 million chickens.
“We work with the best specialists and the best raw materials to get the feed that will help our chickens grow optimally. And we get it right.”
Schutte’s business strategy has always been straightforward, the Financial Mail says: focus exclusively on poultry and drive down costs to provide affordable products to consumers. “It’s a simple strategy,” he says, “even though the business itself is complex.”
Consolidation is key to the industry’s survival, according to Schutte. “Small-scale operations will struggle to survive. The industry keeps changing. Consolidation is necessary.”
Larger producers benefit from economies of scale, spreading fixed costs across millions of chickens while securing better prices on feed. Schutte warns that smaller farms will struggle to compete as costs rise and market pressures intensify.
Schutte leaves Astral on a high. The company has returned to profitability after the disastrous 2023 year, where high levels of load shedding (power cuts) and the country’s worst bird flu outbreak led to the first annual loss in Astral’s history. Astral had to borrow R2bn to keep its operations running.
Now Astral is debt free. By the end of the 2024 financial year, Astral had achieved an operating profit of R1.23 billion, was able to pay a dividend to shareholders and could reward staff with bonuses.
Arnold inherits a company that Schutte describes as being “as healthy as can be”.
With Arnold as CEO at Astral, the poultry industry leader has a new leader.
