Rainbow Chicken, Country Bird Report Dismal Figures

SOUTH AFRICA - Rainbow Chicken, now known as RCL Foods, and fellow poultry player Country Bird, both reported dismal figures this week.
calendar icon 30 August 2013
clock icon 3 minute read

BusinessDay reports that surging chicken imports from around the world, and escalating feed costs, continue to hammer profits. Both companies are engaging with the government on the introduction of import tariffs.

Most countries have some sort of protection against dumping, but not South Africa. About 50 per cent of the 400,000 tonnes of total poultry imports now come from Brazil, while the European Union has penetrated the "bone-in" or chicken pieces market, where it has achieved a 70 per cent share.

In addition, droughts in Argentina and the US have had a significant effect on global maize and soya prices, with extremely low stock levels in the US heightening price volatility.

The only saving grace for domestic poultry companies seems to be diversification into other markets.

RCL Foods now wants to be a consumer focused food business through the range of market leading brands it acquired through Foodcorp, which typically sells about 200-million loaves of bread and 120-million pies a year.

It also makes Yum Yum peanut butter and Ouma Rusks and manufactures ready-to-eat products for Woolworths and other retailers.

Meanwhile, Country Bird is doing well elsewhere in Africa, with Zambia is turning out to be an important market — the country’s improved economic prospects are spurring an increase in the per capita consumption of chicken, and the cost of production there is a lot lower because maize is subsidised.

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