Astral enters into supply agreement with Quantum - CNBC Africa

Astral enters into supply agreement with Quantum

Southern Africa

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Astral Foods will be supplied with approximately 550,000 broilers per week by Quantum. PHOTO: Getty Images

As part of the agreement, the integrated poultry producer’s Country Fair abattoir in the Western Cape will be supplied with approximately 550,000 broilers per week by Quantum – a company within the Pioneer Food Group.

(READ MORE: Astral Foods acquires poultry assets)

“The tough market conditions over the past two to three years have resulted in a tremendous margin squeeze on poultry producers, which has led to numerous poultry business closures and subsequent industry consolidation,” said [DATA ARL:Astral Foods Limited].

“Under these conditions, exploratory talks between Astral Foods and Quantum commenced and an opportunity to preserve primary poultry production, processing and distribution in the Western Cape region was identified.”

The company’s total broiler processing capacity is expected to increase to approximately five million birds per week. Quantum will maintain its breeding operations and the rearing of broilers while Astral Foods purchases the broilers from them for further processing, distributing and marketing.

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

“Astral Foods will have to increase capacity at its County Fair operation to accommodate the additional broilers and, to this end, will invest approximately 80 million rand in expanding its facilities and will thereby be creating a significant number of new jobs at County Fair,” it said.

“The agreement will be fully implemented following the suspensive conditions being met, and the completion of the expansion of the facilities at County Fair which is expected to take approximately five months.”