Competition Tribunal sticks neck out for merger between ostrich giants
Last week the tribunal conditionally approved the merger between Klein Karoo International (KKI) and Mosstrich. One of its conditions was that there would be no job losses from the date of the merger.
The merged company, to be known as Cape Karoo International, currently has abattoir facilities in Oudtshoorn, Mossel Bay, De Aar and Graaff-Reinet and tannery facilities in Mossel Bay and Oudtshoorn.
There had been concerns that hundreds of jobs would be lost in Mossel Bay and Oudtshoorn, where the merged company’s operations were concentrated, but Francois de Wet, the designated managing director, said at the weekend that due to the low production levels of ostriches in the last year as well as the low volumes for the next year, “chances are slim that new job opportunities will be created during the next year”.
“We do envisage, however, that the industry will recover in a couple of years and new jobs will then be created,” said De Wet.
There were more than 400 registered ostrich farms in South Africa and the number of farmworkers directly involved with farming activities differed from farm to farm, according to the number of ostriches raised on a specific farm, said De Wet. KKI and Mosstrich supplied ostrich slaughter and ostrich feather-related services to ostrich farmers, as well as tannery services for the skins. The markets for the supply of ostrich feathers, meat and skins were largely export-orientated.
Answering a question as to which divisions of the merged company would be most likely to create jobs, De Wet said: “The new company aims to stabilise the industry as far as possible and slowly grow the total South African production again, with the subsequent job creation.
“In terms of processing/manufacturing of all the different product lines, it’s also difficult to give an exact number because there are hundreds if not thousands of people involved downstream,” said De Wet.
Among conditions imposed by the tribunal were that the entity would, after the transaction, be obliged to offer at least 40% of its slaughter line ostrich feathers on tender in each financial year and would have to comply with certain annual volume conditions in relation to their supply of ostrich meat for local consumption.@MwangiGithahu