Astral Foods acquires poultry assets - CNBC Africa

Astral Foods acquires poultry assets

Southern Africa

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Astral Foods Limited is an integrated poultry producer. PHOTO: Getty Images

The integrated poultry producer successfully acquired certain poultry assets previously owned by Darling Fresh Chicken (Pty) Limited.

“The abattoir assets previously owned by Darling Fresh Chicken recently came up for sale on a liquidation auction. Astral submitted a bid for the abattoir equipment as these assets would add value to its existing operations. An amount of 5.1 million rand secured the abattoir processing equipment for Astral,” said [DATA ARL:Astral Foods Limited] chief executive, Chris Schutte.

It also recently acquired poultry assets belonging to Argyle Poultry Farms in KwaZulu-Natal in South Africa following a liquidation sale.

Both acquisitions are expected to allow the company to expand its footprint in the KwaZulu-Natal market, in the fresh and value-added poultry segments as well as be put to use expanding capacity at Astral’s County Fair operation in the Western Cape.   

“It is unfortunate that the local poultry industry has seen the demise of a number of smaller poultry producers,” said Schutte.

(READ MORE: S.Africa's tariff increase affects European poultry producers)

He added that currently the industry in South Africa, where poultry tariffs were recently implemented to protect the industry from import dumping, has seen a number of small to medium-sized producers continue to face financial distress.

“The tough market conditions over the past two to three years have resulted in a tremendous margin squeeze that has had a severe impact on non-integrated small to medium-sized poultry producers. The acquisition of distressed assets supports our commitment to continued local poultry production and supply,” Schutte said.

The company reported that group revenue for the year ended 30 September 2013 increased by four per cent to 8.5 billion rand from 8.2 billion rand in 2012.

(READ MORE: Astral fares well despite rough poultry industry conditions)

Operating profit however decreased from 477 million rand in September 2012 to 272 million rand in 2013.