Chicken Stock On The Boil

SOUTH AFRICA - Investors making a grab for a stake in the R13-billion industry
calendar icon 2 May 2007
clock icon 3 minute read
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South African chicken companies are flying high.

A spate of corporate activity in the R12-billion to R13-billion-a-year chicken industry reflects its growing value.

Country Bird Holdings is scheduled to list on the JSE this week. Kevin James, chief executive of the Bloemfontein-based company that is the third-largest local producer of chicken, expects to raise as much as R1-billion to increase its operations.

And investment company Remgro, in which the Rupert family has a stake, has made a bid for control of Rainbow Chicken. Remgro has held an interest in Rainbow Chicken for several years, and has now offered to buy the rest of the company for about R1.72-billion.

In terms of the offer, Rainbow is valued at about R4.5-billion. If the offer, being evaluated by the Rainbow board, is accepted, the poultry producer will delist from the JSE in June.

Statistics show that from 1960 to 2005, the local annual beef consumption per capita dropped from 26kg to 13kg. Conversely, the South African Poultry Association says consumption of chicken has increased from 2.5kg to 22.4kg over the same period.

This is attributed to the emergence of a middle-class consumer, who is eating more chicken. It is a relatively cheap source of protein, and seen as being healthier than red meat.

Source: SundayTimes
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