By: Natasha Archary
South Africa’s biggest poultry producer Astral Foods reported a R1.6 billion loss for the first time in 23-years, due to the electricity crisis and the worst avian flu outbreak in years.
CEO of Astral Foods Chris Schutte joins Kaya Biz to unpack the current operating environment and challenges that played a role in this significant loss.
“The reality is that we had to cut back 50 million birds on the ground that we were unable to process because we had to catch up on the backlog in our production.
The biggest impact was probably not in the supply or quantity of our chicken but in our product mix, with the older, heavier birds created a situation where unfortunately it produces a bigger portion.
Most of your listeners are probably familiar with chicken brands such as Goldie, you would have seen before this period of loadshedding that there were bigger portions, and now there’s smaller portions in the IQF 2kg or 5kg bag.
This is all a result of loadshedding and the sizes of the birds we had to process, so it was a very difficult situation, and we understand the impact this had on our product quality.
What I can say is that since the middle of June our backlog has caught up, and the product quality and the size of the birds that we are processing is back to the regular quality consumers will remember.”
CEO of Astral Foods Chris Schutte
More than 1 million birds were lost to avian flu this year, resulting in Astral food reporting a R621 million operating loss in the financial year which ended on 30 September.
Power cuts disrupt slaughter programmes and increase the cost of stock feed as chickens remain on farms longer. Loadshedding also forces the poultry producer to use diesel-powered generators as an alternative, which raises operation costs.
