TUMI Mokwene in his broiler house near Lanseria airport. Astral Foods said yesterday that it had signed an emergency agreement with Standerton Municipality as an interim measure.
JOHANNESBURG - Astral Foods said yesterday that it had signed an emergency agreement with Standerton Municipality as an interim measure to stave off the current water crisis after a number of national government departments stepped in.

The company said in the terms of the agreement, Standerton (Lekwa) Municipality had committed itself to supply a minimum of 2 megalitres of treated water a day at Astral’s Goldi processing plant via the municipal infrastructure.

The municipality also made Astral an emergency “service receiver” and agreed to cede 3.5megalitres daily of their raw water allocation from the Vaal River system to the group for two years.

The company previously reported that it had suffered a R85million cut to its profit as a result of the water supply interruptions.

Astral highlighted the damage that the interruptions had caused during the release of its six-months results to end March, where it reported a 68.9percent decline in the operating profit of its poultry division.

Chris Schutte, Astral’s chief executive, yesterday lambasted the government for the collapse of the water service. “I am flabbergasted that government structures are fixated with the concepts of a fourth industrial revolution, and now bullet trains and mega-cities, while they are unable to provide basic services to existing companies such as Astral, and many other established and successful businesses... We are continuously bombarded with rhetoric about global competitiveness, the need for growth in rural agro-processing, creating jobs in rural communities and ensuring food security, while Astral, the largest producer of affordable chicken in South Africa, is left to fend for itself with little more than a ‘bucket system’ supply of water,” said Schutte.

The company has previously secured a high court order, which obliged the municipality to submit a long-term plan on how it intended repairing and improving the municipal water supply infrastructure.

Schutte said the legal route seemed to be the only avenue to determine which tier of the government was ultimately accountable for the upkeep of municipal infrastructure.

“Although some plans have been forthcoming to resolve this water situation on a longer-term basis, Astral will not rest until it has been clearly determined who is ultimately responsible to execute such plans.”

The water crisis had escalated to the point where the municipality could not even supply the 4 megalitres per day secured by means of a mutually agreed court order, the company said.

“At the peak of the crisis absolutely no water was supplied for a seven-day period, leading to a significant negative impact on the integrated agricultural supply chain,” the company said.

Andy Crocker, the managing director of Astral’s commercial division, said the arrangement with the municipality meant that the company should have access to sufficient water to run the processing operations in the short term, albeit at a significantly higher cost.

BUSINESS REPORT