Following a strike by some union members, normal production has resumed at a processing facility operated by Rainbow Chicken, one of South Africa’s leading poultry companies.
Earlier this week, an agreement was reached between company and union at the Rainbow Chicken processing plant at Hammarsdale in KwaZulu-Natal, and workers have returned to work.
On December 6, a strike was called by members of the Agriculture, Food and Allied Democratic Workers Union (AFADWU), reported GroundUp. The union had justified the action by alleging that Rainbow Chicken had unlawfully terminated their rights by refusing to recognize its employees as members of the AFADWU.
Discussions between the company and the union resulted in a settlement on December 11. The strike was called off, and the employees affected returned to work.
According to the company, AFADWU had demanded rights of recognition and organization at the plant, despite not meeting the required minimum threshold.
In a statement, Rainbow Chicken stated it already had a recognition agreement with two other unions. It added that production volumes were maintained during the strike.
More on Rainbow Chicken
In 1960, Rainbow was founded by Stanley Methven when he began selling birds reared on his father’s farm from a stall in Durban, according to the company’s web site. As demand for the chickens grew, the firm’s first processing plant was commissioned in Hammarsdale in 1963.
Now a separate entity within RCL Foods, Rainbow is a vertically integrated broiler producer. It breeds and rears its own birds, and produced feed at its Epol feed mills, as well as processing, distributing and marketing fresh, frozen, further processed and value-added chicken products.
For the last financial year ended June of 2023, RCL Foods reported total group sales revenue of 37.8 billion rand (ZAR; US$2.06 billion). Despite a year-on-year increase of 17.3% in revenue, operating profit — expressed as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) — was 24.5% lower than the previous corresponding period at ZAR1.71 billion.
CEO Paul Cruikshank described the year as among the hardest the South African business had faced. As well as record levels of load-shedding (power supply disruption), he highlighted the main challenges of rising inflation, municipal service delivery failures, and growing unemployment.
RCL Foods operates in a number of agri-food sectors. Its Value-Added Business delivered revenue of more than ZAR24.5 billion through its Groceries, Baking, and Sugar business units. The latter includes molasses-based Molatek Animal Feeds.
In 2021, RCL Foods separated its Rainbow business from the Value-Added Business, and Rainbow now operates as a largely independent entity.
With around 6,500 employees in the last financial year, Rainbow generated revenue of ZAR13.6 billion. Main products are chicken, and Epol and Driehoek animal feeds. In the last financial year, output included 328,000 metric tons of chicken products, and 1.3 million metric tons of animal feeds.
Recent developments in Rainbow’s business
In August of 2023, RCL Foods sold its stake in HMH Rainbow Ltd in Uganda.
At the end of September, Rainbow announced that its business had been impacted by the outbreak of highly pathogenic avian influenza that had been impacting South Africa’s commercial layer and broiler farms. At that point, the outbreak had affected 11 of the company’s 19 sites in the Inland region, which is one of three regions where Rainbow operates.
Up to that date, around 410,000 of the firm’s birds had been culled, and the financial cost was estimated at ZAR115 million.
With annual slaughtering of 197 million birds, Rainbow is the second largest poultry company in Africa, according to the WATTPoultry.com’s Top Poultry Companies survey.
