He cautioned, however, that the company's broilers - chickens raised for meat - were fed mainly on maize, and higher prices for grain and fuel prices increased the input costs of producing a chicken.

These inflationary costs would have to be recovered in the marketplace and eventually feed through to higher retail prices.

Wright said the acquisition of the broiler business vindicated Afgri's decision to re-enter this market.

During strong domestic economic growth, where demand for broilers was growing at an average of 5 percent a year, the company contributed R347 million to group turnover and R41.1 million to profit before interest and tax.

A R410 million expansion project to double production had already been approved and more staff would be hired, he said.

The group declared a 65.6 percent increase in headline earnings of 65.1c for the year to February 2007 and lifted earnings a share by 4.4 percent to 59.9c.

Source: Business Report