Poultry producer fights the odds successfully

The Doringkloof, Centurion based Astral Foods was created in 2001 when Tiger Brands unbundled its agricultural arm. Astral listed on the Johannesburg Stock Exchange during April 2001. The company's three divisions produce chicks, manufacture feed and slaughter poultry. Astral Foods boasts seven local feed mills and four abattoirs. Most of the poultry is produced for South African supermarkets and wholesalers.

The business has had to adjust to changing transportation dynamics in South Africa, Schutte says. Rail transport, which once accounted for up to 85% of Astral Foods' logistics needs, has been gradually scaled down. "We now rely on road systems [...] which [are] three times more expensive," Schutte reveals. As a consequence, base costs for the raw used in feed have gone up significantly. "At the same time our energy costs have been rising by an average of 25 per cent each year over the last four years," he says. "The combination of these two challenges puts pressure on the poultry industry here in South Africa and creates a tougher environment for us to compete with cheap imports from countries like Brazil."

Schutte tells Business Excellence Magazine that whilst the efficiency of South African poultry producers compares favourably with other areas of the world, rising production costs are making the industry less competitive and susceptible to the threat of cheaper imported meat that may not be subjected to such stringent quality checks.

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