The slow implementation of the poultry master plan, particularly regarding chicken exports, is highlighted in the first annual report from newly listed Rainbow.
Rainbow was unbundled from RCL Foods and listed on the Johannesburg Stock Exchange in July this year. It has now published a consolidated financial statement and its 2024 annual report.
The master plan was signed by government and the poultry industry in 2019. It aimed to revive an industry in crisis because of a flood of dumped chicken imports. Priorities included curbing imports and expanding production for the local and export markets.
The industry met and exceeded its commitments, investing more than R1.5 billion in additional capacity. Government support, however, was sporadic and the envisaged exports bonanza did not happen. Instead of doubling and trebling as the master plan foresaw, chicken exports were lower in 2023 than when the plan was signed four years previously.
Rainbow’s criticism shows why government and the poultry industry are discussing an update to the master plan.
“The progress of the Poultry Sector Master Plan has been slow, despite substantial investment in capacity by the industry,” Rainbow stated.
“Rainbow and its growers have invested over R500 million in Hammarsdale to double processing capacity. Another critical aspect of the Master Plan is to expand the market and support exports. However, the industry requires greater and more urgent support from the Government to access export markets.”
Rainbow also noted that, despite a master plan commitment to implement trade measures to support the industry, anti-dumping duties on Brazil and four European Union countries were delayed for a year and imposed only in August 2023.
In addition, former trade minister Ebrahim Patel had proposed import tariff rebates in the event of market shortages following bird flu outbreaks. Rebates were implemented for the first three months of 2024 based on a recommendation by South Africa’s trade regulator, the International Trade Administration Commission (ITAC).
“The industry has worked more closely with ITAC to ensure that no further rebate permits will be issued without also considering information supplied by the South African Poultry Association (SAPA) on whether a shortage does or does not exist.” Rainbow stated.
It said there had been no new developments on the Competition Commission investigation into the broiler and layer industries, announced in February 2024, because of concerns about the concentrated structure of the poultry industry.
“With Minister Parks Tau having been appointed as Minister Ebrahim Patel’s successor in the DTIC, an update is expected in due course,” Rainbow said.
