Chicken Industry

PIC takes full control of Daybreak

THE EMBATTLED Public Investment Corporation (PIC) has acquired full control of poultry producer Daybreak Farms after the Competition Tribunal approved the takeover with conditions.

The tribunal said the PIC should engage in the investment of “certain assets, management and administration of pensions and other benefits and compensation of employees emanating from injury or disease through the course of employment, respectively”.

The purchase by the PIC, Africa’s largest fund manager which controls nearly R2 trillion on behalf of the Government Employees Pension Fund, come after the ANC in January called on the government to buy beleaguered poultry farms negatively affected by “dumping” of cheap chicken from the US, Brazil and the EU.

In February, Daybreak Farms issued a stern warning that 3 000 direct jobs would be negatively affected should imports of the chicken portions continue.

The poultry producer, which has an integrated operation with its own feed mill that manufactures and supplies broiler feed, broke the mould last year when it reportedly tapped on the township and informal sector by creating a network of franchisees that were provided with freezers, on condition they only stocked its products.

The domestic poultry sector has been hard done by poultry importsfrom outside South Africa’s borders.

As part of the African Growth and Opportunity Act, which provides duty-free market access to the US for qualifying African states, including South Africa, the US exports 65 000 tons of chicken a year into the country. The imports have seen poultry producers such as RCL Foods laying off more than 1 000 employees and selling about 13 of its 25 farms in Hammarsdale, KwaZulu-Natal (KZN).

However, in April the eThekwini municipality offered RCL Foods R15 million for the Uitkomst and Doornrug chicken farms, as part of its Radical Agrarian Socio-Economic Transformation Programme.

In an exclusive interview with Business Report last month, Jim Sumner, the president of the USA Poultry and Egg Export Council, defended the global power house’s controversial stance on the imports, saying chicken consumption exceeded production in South Africa. He said while chicken production increased yearly in the country, consumption ballooned faster.

The poultry industry has also been dealt a blow by the persistent avian influenza scourge which has been confirmed in Gauteng, Mpumalanga, North West, KZNand the Eastern Cape. More than 700 000 birds have been culled in the country in June.


First Published in The Star on 12 October 2017
by Luyolo Mkentane