Chicken Industry

Death of a town

Farook Kadodia is a very worried man.


The owner of a Hammarsdale supermarket, located in Durban in KwaZulu-Natal, has every reason to be concerned after spending – just last year – several million rands on extending and upgrading his Hammarsdale Hyper store.


The supermarket is right next door to the main Rainbow Chickens P2 processing plant.


It is just before midday when Kadodia closes shop on Friday to attend prayers at the local mosque. But the supermarket, with its brand new ovens and shelving, is quiet.


The effect that Monday’s retrenchment of more than 1 000 workers at Rainbow Chickens (now RCL Foods) has had on his business is already apparent.


He has had to send half his staff home because there were no customers for them to serve.


“This is already having a huge impact on business,” says Kadodia, who has been serving Rainbow workers from his supermarket for 20 years.


“It is going to get worse. People still have their retrenchment packages, so the real impact has not filtered through yet. It will.


“This is scary,’’ he adds.


“We already felt the impact in December because people were scared to spend what little they had. We have a lower-income market, so we have to provide quality products at low prices and make our profit on turnover.


“If we do not have volume, it puts pressure on our profitability.”


This week, Rainbow laid off more than 1 000 staff.


Some were from P2, but the bulk came from the 25 farms the company has put up for sale, which have been earmarked to become warehouses or factories at the industrial park currently under development in Cato Ridge.


Another 300 staff whose jobs were cut have been redeployed to other RCL operations in other provinces.


The latest round of retrenchments, caused by the R1m-a-day losses the iconic KwaZulu-Natal chicken producer has sustained – as a result of drought-driven maize price hikes and competition with cheaper chicken dumped from abroad – will have an effect far beyond them and their families.


“In the 1970s and 1980s, Hammarsdale was KwaZulu-Natal’s industrial and textile hub,” Kadodia says.


“The town has been hit hard by the closure of the textile sector here and by three sets of retrenchments at Rainbow. Every time the area seems to be stabilising, we get hit again.”


Located towards Durban’s western boundary, Hammarsdale was the home of KwaZulu-Natal’s textile industry from the 1950s, with Mpumalanga township having been set up by the apartheid government to house workers brought in to work in the factories.


Surrounded by farmland, the town also became home to dairy and chicken farms, which spread towards Cato Ridge and Camperdown.


But from the late 1980s, the inflow of cheap textiles from countries such as China, and the movement of employers to areas with lower labour costs, began to eat away at Hammarsdale’s economy.


Massive employers such as textile giant the Frame group pulled out of the town, shedding thousands of jobs.


Online data tool Wazimap reveals that by the time the 2011 Census was taken, the official employment rate here sat at a meagre 28%.


Figures revealed that the bulk of the residents of the six wards making up Hammarsdale – one industrial, one rural and four urban – were poor, earning less than R2 400 a month.


Now, with the loss of 1 000 pay packets, matters are going to get much worse.


Mthetheleli Mjilo, a local landscaping contractor and a leader of the Hammarsdale Business Forum, grew up in the area and saw it during its heyday.


“When I grew up here, there were jobs in the textile industry.


“In 1994, when Nigeria played in the soccer World Cup, my older brother was working in the factory here that made their shirts. This place had jobs,” he says.


Mjilo adds that the level of prosperity in the area has gradually declined, with a ward-based municipal survey he took part in five years ago indicating that nearly half of residents were unemployed.


“The area cannot take much more of this,” he says.


“The textile industry went first. Now it is chicken. For every job that is lost, you can say another six people are going to bed with nothing to eat.


“That’s another 7 000 people going hungry in this area. We have a very big problem here.


“This is the last kick of a dying horse for Hammarsdale. We already have thousands of young people who are finishing school and who cannot get jobs locally.”


Local businesspeople – himself included – are already feeling the pinch.


“The people who have been retrenched are already not spending money on doing their gardens, taking taxis or buying here at the shopping centre,” he says, in reference to the location for our interview.


We are at the Hammarsdale Junction, a new mall serving Mpumalanga township and the nearby industrial areas.


“This place gets busy when the Rainbow bus drops staff off when they finish their shift. No more,” says Mjilo.


Sihle Khanyile (33), a local tow-truck operator, is also already feeling the pressure.


“When the textile factories closed, it already hit business. Fewer people in jobs meant fewer cars and taxis, and less work for me. Now, with another 1 000 people not going to work, it is hitting me too,” says Khanyile.


The retrenched workers feel equally bleak about the situation.


Godfrey Mtshali (57), a retrenched human resources officer at RCL, spent his week trying to deal with life with no job. “It is tough,” says the father of three university-going children.


“I do not know what I am going to do. Things are very hard out there, and there are no posts going. At least I have the means to try something, but what about those with less skills? How are they going to survive this?”


RCL managing director Scott Pitman says the retrenchments and farm sales have only bought the company time, and that more lay-offs may follow.


“We just bought ourselves some breathing space. The situation has not improved and if government does not act in the next month or two, this industry will be dead in 12 months,” he says.


Pitman says the farms are being sold off as warehouses and for industry, as the area has been earmarked for a logistics hub to eventually serve a dedicated truck road linking the area to the Durban harbour.


RCL has set up a R1 million training fund to try to reskill staff who have been laid off.


“We are trying to provide some skills to people to enable them to try to get work. Having said that, getting a job in the current environment is no easy thing,” says Pitman.




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This article was first published on on 5 February 2017