Chicken Industry

Chicken producer weathers Covid-19 storm

A recent article by Charmain Lines examines the importance of a small but growing local chicken producer in the town of Lichtenburg in the Northwest Province.

Henwil Chicken is a member of the South African Poultry Association. It might only have about 5% of the national chicken market, but its impact on its town, local communities and province is exponentially more.

Established in 2002 as an abattoir, the business has changed beyond recognition over the past 18 years. When financial difficulties threatened its existence early on, the 13 chicken farmers who depended on the abattoir formed a company and bought the facility, becoming stakeholders in the truest sense of the word.

Following 15 years of organic growth into areas such as feed, retail and fleet, Henwil’s board of directors called on the business school of the Northwest University in 2017 to help them chart the way forward. The results of the business strategy exercise pointed to focused expansion: higher volumes, lower unit costs, increased competitiveness and healthier profit margins. Henk Alberts was appointed CEO and tasked with executing the new strategy.

Henwil contributes to the wellbeing and sustainability of the industry by being an agile business, a caring employer and a responsible corporate citizen. During lockdown it has donated chicken worth about R20 000 to four old-age homes in Lichtenburg and Coligny, and joined forces with the Department of Social Development to distribute 2 000 food parcels to needy families. And, once lockdown eases, it will continue assisting the provincial government to establish and operate a new feed mill that will be part of the Springbokpan agri-hub, one of 44 such initiatives across South Africa, aimed at giving subsistence farmers a shot at commercial sustainability.

Given that Henwil counts large wholesalers among its customers, Henk Alberts has a view of the state of imports – long acknowledged to be a significant threat to the local industry. While he doesn’t have sight of statistics, his sense is that the weak exchange rate, falling consumer demand and the implementation of trade tariffs as per the industry master plan are already cutting imports, even without the more direct Covid-19-related disruption of global trade. However, he theorises that a lot of imported meat is languishing in warehouses, waiting for demand to recover. “We could only see the impact of these imports as far into the future as December.”

Alberts is hopeful that the industry master plan, released in November 2019, will shore up the industry. He takes heart from the tariffs that have already been implemented, and from SARS’ commitment to improve the monitoring of imports to ensure accurate declaration of product and payment of tariffs.

Henwil Chicken is a shining example of the extent to which South Africa’s home-grown chicken industry is a national asset.