ROLE-PLAYERS in the poultry industry have been given something to crow about considering the recent gains made by one of the country’s best-known chicken producers.
After their low ebb near the end of 2016 when they were forced to shut down a shift and retrench 1350 workers, KwaZulu-Natal-based Rainbow Chicken producers have bounced back.
They reopened the shift at their Hammarsdale operations and re-employed 750 workers who got the chop previously.
During its 60th birthday celebrations last week, the company announced it was on track to hire a further 100 workers at its “P2” plant by July.
Rainbow’s renaissance comes on the back of its own investment of R220 million and additional funding of R400m from contract growers.
This enabled the company to overhaul its supply and production chain in KZN, which included enhancements and additions to its farms, hatchery operations and processing facilities.
Marthinus Stander, Rainbow’s managing director said: “At the heart of this achievement lies the essence of the ‘Poultry Sector Master Plan’ – a visionary blueprint encompassing facets such as investments, employment generation, poultry exports, and cultivation of contract growers.
“This achievement stands as a testament to Rainbow’s commitment to fostering expansion and catalysing growth within the poultry industry.”
Although the drought and bird flu were negative factors, pound for pound, Rainbow, like other producers in the poultry sector, was unable to match the prices at which dumped chicken were dropping into South Africa.
That’s when various stakeholders from the private and public sector realised their industry needed new impetus and met to chart a way forward.
The Department of Agriculture, Land Reform and Rural Development (DALRRD) and the Department of Trade Industry and Competition (DTIC) facilitated the meeting.
After months of introspection the “Poultry Master Plan” was hatched.
In November 2019, the various stakeholders signed the agreement and implementation of the plan began in 2020.
In spite of teething problems rising mainly out of the Covid-19 pandemic that surfaced in 2020, Rainbow’s success bears testament to the effectiveness of the Master Plan.
Stander said they were committed to it and also got assistance from the government.
“We increased our capacity and took advantage of opportunities to export. Its a happy and significant time for us and the industry,” said Stander.
He said they previously produced 1.2m chicken per week, production halved by the end of 2017, but through adherence to the Master Plan, their output grew back to 1.1m per week since April.
“Our next goal is 1.5m.”
Stander said re-employing a number of their former workers was great for the community of Hammarsdale.
“We are very happy about that,” he said.
Izaak Breitenbach, the general manager of the SA Poultry Association (Sapa), said Rainbow’s turnaround was very important for the economic growth of the industry and KZN.
Breitenbach lauded the effectiveness of the Master Plan and appreciated that the plan was not Sapa’s but from the industry, including trade unions and importers.
He believed working together will continue to grow the industry, produce other benefits and also assist with cost competitive chicken meat on the table for all consumers.
Breitenbach said the best move was made by the government by tightening up on imports.
“For 10 years up to 2019, this industry was not growing and the growth in per capita consumption was taken over by imports. Local production was replaced by imports. But the Master Plan has caused this trend to be reversed and reduced imports.”
He said nine countries were dumping chicken in South Africa but as of August 3, anti-dumping duties were imposed against USA, Brazil, UK, Netherlands, Germany, Ireland, Poland, Denmark and Spain.
“We are now competing on an equal footing with these countries. The International Trade Administration Commission (Itac) found that the dumping by these countries caused material harm to the SA poultry industry.”
Ebrahim Patel, Minister of Trade and Industry, said they increased the tariffs on trade in 2020 in support of the local industry.
“In 2021, we defended SA when we were taken to arbitration by the EU by putting safeguard measures in place.”
Patel confirmed that the anti-dumping duty was made permanent and will apply for the next four years.
He said when devising the Master Plan, they realised that protecting the local industry alone was not enough.
“We needed a competitiveness plan that will modernise the industry further and ensure we have significant trade support and protection for the local industry.”
Patel said president Cyril Ramaphosa mentioned the Master Plan at the 2020 Sona.
He said they also made a major export breakthrough with Saudi Arabia.
“That market is now open for us,” he said.