Government master plan to make producers more competitive
Economy / 22 August 2019, 10:00am / Kabelo Khumalo
JOHANNESBURG – South Africa's embattled poultry industry, which has buckled under the weight of cheap foreign imports, is set to receive a boost from a government-led master plan aimed at making local producers more competitive.
The Department of Trade and Industry (dti) said yesterday that the poultry industry and the government had begun work together to open up new export markets for South African poultry.
Trade and Industry Minister Ebrahim Patel said his department and that of Agriculture, Land Reform and Rural Development had met with industry players to thrash out a growth strategy for the sector following industry concerns over a flood of imports of frozen chicken pieces.
“We need find a road to a more competitive, inclusive industry employing more South Africans. There are opportunities for us to sell more chicken meat in other parts of the world, increase our capacity and bring down prices for local consumers,” Patel said.
“The development of master plans in the poultry sector is part of a series of master plans being developed across priority industries as part of President Cyril Ramaphosa’s re-imagined industrial strategy for South Africa.”
JSE-listed RCL Foods last week flagged that its earnings for the year ended June were likely to plummet more than previously forecast on the back of cheap imports, subdued consumer spending and a difficult trading environment.
South Africa's leading integrated poultry producer, Astral Foods, in May also highlighted the impact of chicken imports on the local industry after it reported a 68.9percent decline in the operating profit of its poultry division for the six months to end March.
To arrest the decline in the industry, said to employ about 50 000 people, the government has teamed up with SA Poultry Association (Sapa) and the Association of Meat Importers and Exporters (AMIE) to come with solutions to reinvigorate the industry.
Sapa said it hoped the master plan would address the disparity in grain prices between South Africa and the US, Brazil and Ukraine.
Sapa’s general manager, Izaak Breitenbach, said there was hope for the industry now that the four key role-players were focused on the same objectives.
“Some trade measures will also be necessary, but not the primary focus; the focus will be more on bilateral agreements,” Breitenbach said.
He said the organisation hoped the master plan also zoomed in on market development, growth into Africa in terms of the Southern African Development Community, the Southern African Customs Union and Africa Free Trade Agreement, as well as access to the EU and the Middle East.
Paul Matthew, the chief executive of AMIE, said the industry was grateful to Patel for his “positive” leadership in facilitating a positive process.
“AMIE brings such wealth to the table regarding our knowledge on exporting poultry/meat into the global village we can assist local producers to gear up for exports,” Matthew said.