AFRICA - South African poultry company Astral Foods has reported profit increases across its African operations.
Astral Foods reported recently that its profit increase for the half year to end March was “attributable to a number of factors, including an increase in poultry sales volumes and realisations, good poultry production efficiencies, an expansion in feed volumes with the incorporation of the company’s new Standerton feed mill, all underpinned by lower feed costs.”
During the period, revenues for Astral Group surged by 22 per cent while operating profits rose by as much as 158 per cent.
The poultry division for the group has top-performed and the company has earmarked further reduction of costs through factoring in efficiency programmes to boost its profitability prospects.
The rest of Africa poultry operations registered revenue growth of 3 per cent as a result of increased volumes in day old chicks sold.
Poultry companies in the region are aiming to expand further into Africa to tap into the growth potential for the region.
The company has earmarked completion of expansion projects for its poultry operations in Zambia and Mozambique to boost its regional operations.
Astral is also boosting its operations in Swaziland and has set its sights on a new poultry operation, most likely in Ethiopia.
"If we do pull the trigger in Ethiopia it will be a greenfields investment, and it will be some time before we see anything at bottom line," said Chris Schutte, chief executive officer of Astral.
However, Mr Schutte said it was likely to take longer for the rest of Africa poultry operations for the company to start contributing immensely to the company’s revenue generating capacity. He said the company would be happy to have the African poultry business contributing 10 per cent to 15 per cent to revenues in the next few years.
"If you ask whether Africa will ever represent 50 per cent of Astral’s revenue then that might take 20 to 25 years. But if we can get to 10 per cent to 15 per cent in the next few years then we would be happy with that."
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