South African chicken industry flying

Investors are going for the R13 billion ($1.8 billion) South African chicken industry, which is significantly growing in value.

South Africa's Country Bird Holdings is scheduled to list on the JSE on 3 May. Chief executive Kevin James says that the company is the third-largest local producer of chicken, and expects to raise R1-billion($142 million) to increase its operations.

Investment company Remgro has made a bid for control of Rainbow Chicken, the largest chicken producer in the country, slaughtering 4 million birds a week. Remgro has offered to buy the company for about R1.72 billion ($244 million). Rainbow is valued at about R4.5 billion ($640 million). If the offer is accepted, the poultry producer will delist from the JSE in June.

Statistics show that from 1960 to 2005, the local annual chicken consumption per capita has increased from 2.5kg to 22.4kg, according to the South African Poultry Association. This is attributed to the emergence of middle-class consumers who are eating more chicken, which is a cheaper source of protein and is seen as being healthier than red meat. Miles Dally, CEO of Rainbow Chicken, says the increase in demand echoes a worldwide trend. In total, 12.4 million chickens are slaughtered in South Africa every week.

Dally warns that with maize prices rocketing, the cost of chicken would rise. The expectation in the market is that the increase will be in double-digit figures. George Sombonos, founder of Chicken Licken, said the price of poultry was going to go up 9.8%.

World Poultry