Cock-a-hoop Astral sets its beady eye on feeding Nando’s

Business

Cock-a-hoop Astral sets its beady eye on feeding Nando’s

CEO Schutte vows to battle ‘job-killing’ poultry imports

Marc Hasenfuss

Astral Foods, the JSE’s big bird of the poultry sector, is committed to capital expenditure of R1.3-billion over the next three years. 
Speaking after the release on Monday of interim results that showed bumper profits, Astral CEO Chris Schutte said the company was determined to invest significantly in production and operational efficiencies that would boost Astral’s overall capacity by 20% to 25%, an additional million birds per week.Ron Klipin, an analyst at Cratos Wealth, said Astral’s capital expenditure plans should enable the company to keep or increase market share.
“The increased capital expenditure should help increase market share from 27% to 31% with major demand by groups such as Nando’s looking to diversify their source of chicken supply.”In terms of financial performance for the six months to end March, revenue increased 15% to R6.7-billion with operating profit up more than fourfold to over R1-billion. The strong performance prompted a interim dividend of R10/share.
Schutte reported that poultry imports continued unabated, although imports from the EU reduced markedly due to the outbreak of bird flu. But he noted a major swing in imports from Brazil and the US. On average, the monthly total poultry imports for the period under review equalled  approximately 44% of local production. 
“It’s easier to plan if imports are stable but it’s still a job killer,” said Schutte. He maintained Astral was able to “take up the slack” in replacing imports with local production. “We are willing to invest heavily in such an endeavour.”
Schutte also disclosed that Astral – which earns most of its keep from the IQF (individual quick frozen) segment – would invest R30-million in increasing market share in the QSR (quick service restaurant) market.

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