Rioting in South Africa proves costly for Astral Foods

Rioting and looting in South Africa has caused a multitude of problems for Astral Foods, with the company estimating the unrest has cost the company about ZAR16 million (US$1.08 million).

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(Oleg Kharkhan | Dreamstime.com)
(Oleg Kharkhan | Dreamstime.com)

Rioting and looting in South Africa has caused a multitude of problems for Astral Foods, with the company estimating the unrest has cost the company about ZAR16 million (US$1.08 million).

Riots and violence started earlier in July following the arrest of former South African President Jacob Zuma, who was convicted of contempt of court after failing to attend an inquiry into corruption during his time in office. While the unrest has largely subsided, Astral Foods and other companies in South Africa are dealing with the aftermath.

According to a report from News24, the rioting caused transportation difficulties, which meant that the company struggled to get access to feed. That also meant that it couldn’t deliver parent stock chicks to farms. As a result, the company had to euthanize 44,000 chickens used for breeding stock.

Adding to Astral Foods struggles was the fact that many of the stores to which Astral’s poultry products were delivered were closed or inoperable during the rioting. In addition, Astral Foods’ plant in Camberdown, KwaZulu-Natal, was out of operation for four days, and it was expected to take up to two weeks for it to return to full production.

Another South African poultry company, RCL Foods, earlier reported struggles with gaining access to soy to produce feed.

Izaak Berintenbach of the South African Poultry Association (SAPA), said while the poultry industry did not have any property burned down during the riots, there were problems with the theft of chickens.

Astral Foods and RCL both slaughtered 260 million chickens during the past year, making them the two largest broiler producers in Africa. Other top South African poultry companies include Country Bird Holdings, Sovereign Food Investments, Daybreak Farms and Quantum Foods.

A publicly traded company, the key activities of Astral Foods, according to its website, are animal feed pre-mixes, broiler genetics, sale of day-old chicks and the production and distribution of fresh, frozen and value-added chicken products.

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