Durban - Rainbow Chicken Limited (RCL) on Thursday announced it was going to cut production at its Hammersdale facility by half in a move that would lead to job losses in the poultry industry.
The chicken producer blamed the existing free trade agreement between South Africa and the EU for its troubles, claiming that more jobs would be lost if the government did not balance the playing fields.
RCL said the company could be forced to cut more jobs if the situation did not improve.
It said this would take job losses in the poultry industry to nearly 3 000 in the next three months alone as producers battled with production costs.
Marthinus Stander, the chief executive of Country Bird and the chairman of the SA Poultry Association’s Broiler Organisation, said the industry was faced with chicken imports that were easily finding their way into the country. Stander said a record volume, particularly of chicken portions mostly from the EU, had forced the local industry to review its position.
“Protection for our local industry is very limited with no barriers to entry applicable to the EU as a result of a bilateral free trade agreement. This is creating jobs abroad, while shedding jobs in South Africa.” Stander said.
SA signed an Economic Partnership Agreement in June with the EU and other countries in the southern Africa region to boost trade.
The industry also has to contend with the African Growth and Opportunity Act until 2025, which allows US poultry access into the local market. The EU exports nearly 72 percent of poultry coming to South Africa while Brazil brings 17 percent.
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The US only accounted for 8 percent of the imports in the nine months to September.
The Food and Allied Workers Union (Fawu) has thrown its weight behind the local producers’ call to for a limit on poultry imports.
The union’s general secretary, Katishi Masemola, on Thursday said Fawu was planning more marches to EU offices and Parliament to protest the imports.
He said the union had already petitioned the departments of trade and industry and agriculture to ask for government intervention.
“We are pleading with the government to reconsider the rules that allow cheap poultry imports to enter our shores as they have the potential of causing permanent damage to the livelihoods of thousands of South Africans.
“We have a high unemployment rate and we must be careful not to add the poultry industry in this already high number,” Masemola said.
“I have been told that one company is losing R1 million a day and RCL Foods is about to retrench workers. We are losing jobs while other countries are creating jobs at our expense.”
Sidwell Medupi of the Department of Trade and Industry said that the government the was doing everything in its power to protect the local industry.
He said while the government understood threats facing the industry, there were still processes to follow before any changes were made.
“Stakeholders must submit their proposals to the international trade administration commission and this statutory body will investigate any matter forwarded to it.
“After that they will recommend to the minister after making its findings. We are doing something as a department and currently we are engaging the EU on various matters,” Medupi said.