A government-led task force set up to “deal with the crisis in the domestic poultry industry” has developed a collective action plan to support South Africa’s beleaguered chicken sector. This represents “significant progress” said the government, which has begged the industry not to close factories or slash jobs to reduce costs.
The poultry industry is under intense pressure, with bloated oversupply in the domestic market exacerbated by record levels of dumped imports from South America, the US and EU.
Some of the country’s biggest poultry processors, including RCL Foods and Astral Foods, last year issued gloomy profit warnings as chicken supply surged past domestic demand.
Trade interventions likely
With profits for a number of businesses expected to fall, the government recently stepped in to set up a poultry task force.
This is comprised of DTI representatives, alongside peers from the departments of Economic Development and Agriculture, Forestry and Fishing, as well as a representative from the government-owned Industrial Development Corporation. The South African Poultry Association (SAPA) represents business, while the Food and Allied Workers’ Union represents labour.
The task force has discussed interventions on trade, meat safety, competitiveness, industry growth and transformation, and industry financing. No concrete plans have been yet been made public.
A set of short-term recommendations will be submitted for ratification to lift the beleaguered industry out of the crisis, but the DTI could not be reached to confirm when these proposals will be ready.
Until these proposals have been submitted to ministers and can be implemented, the government has asked the industry not to close meat factories or cut jobs.
Comment from SAPA could not be obtained at the time of writing. RCL Foods declined to comment.