Rainbow Chicken warns of R115m bird flu hit
Namibia suspends SA imports
South Africa normally produces some 22 million broilers for consumers per week.
Karl Gernetzky - Shares of Rainbow Chicken owner RCL Foods slumped almost 8% yesterday morning after it warned SA's worst-ever bird flu outbreak has killed an estimated 410 000 birds at a cost of R115 million.The company, valued at about R7.6 billion on the JSE, said the outbreak has affected 11 of its 19 sites in its inland region, with the group also operating in KwaZulu-Natal and the Western Cape.
"The outbreak has moved at a rapid pace, and the situation is constantly evolving," the company said.
RCL said it has taken all necessary steps to contain the spread of the virus, which includes working with the department of agriculture, land reform and rural development to gain registration and approval for suitable vaccines.
"In addition, all things necessary are being done to efficiently manage and mitigate supply chain disruptions, however it is essential to acknowledge that there is tension in the supply chain."
Fallout
The fallout from the current outbreak is expected to reverberate across the poultry sector in the coming months, with Astral, the country's biggest chicken producer, warning this week that South Africa should brace for poultry meat and egg shortages in coming months.
There are concerns that the market could be short about 20% of its current requirements for domestic production over the next few months, with South Africa normally producing some 22 million broilers for consumers per week.
Namibia on Wednesday suspended imports of live poultry, birds and poultry products from South Africa following the spread of highly pathogenic avian influenza (HPAI) in the neighbouring country.
The suspension is in effect until further notice, the agriculture ministry said in a statement.
Namibia consumes an estimated 2 500 tons of chicken every month, relying on imports mainly from South Africa.
South Africa is facing a major bird flu outbreak that poultry producer Quantum Foods said last week had killed about two million chickens.
Market impact
Rainbow Chicken's Simply Chicken was South Africa's market leader in the chilled processed meats and freezer-to-fryer categories as of the group's year to end-June, when its chicken division contributed just over a third of about R38 billion in total revenue.
RCL also owns brands, including Selati sugar, Yum Yum peanut butter and Nola mayonnaise.
Shares in the group had slumped 7.8% in morning trade yesterday and have fallen by more than a fifth in the past one year. – Fin24/Reuters