How important are African markets to Astral’s growth strategy?
Astral has had investments in Zambia, Mozambique and Swaziland for more than 10 years and has a strategic growth plan for Africa. Opportunities in the region are constantly being evaluated and when these fit our strategy, we will invest. Countries such as Zambia and Mozambique offer Astral growth opportunities where per capita consumption of chicken is below levels seen in South Africa. The group has committed R52 million in expansion capital expenditure for Mozambique and Zambia as at August 2012.
What is your growth strategy for Africa?
To grow the feed and broiler businesses in Africa one has to have feed and day-old broiler chickens. Our business plan for Africa begins by entering a market with feed premixes and concentrates, followed by feed production. Breeding and hatcheries will follow and broilers and abattoirs will complete the investment value chain.
Astral CEO Chris Schutte at the Country Fair broiler processing plant.
How long have you been operating in Mozambique?
For more than 10 years. In December 2000, we established a feedmill (Meadow Mozambique Limitada) in partnership with Jorge Tinga, the mayor of Namaacha and a respected businessman and farmer. We have experienced growth in our business and based on the same model as successfully implemented in Zambia, the next logical step was to open a hatchery and breeder farm, Mozpintos Broiler Hatchery. It was officially opened on 6 October by Maria Elias Jonas, governor of Maputo.
How does the Mozambique model differ from the Zambian model?
The models are the same. In Zambia we also began with a feed mill operation and in 2010 we established a breeder farm and hatchery operation called TigerChicks.
Does Mozambique have a favourable economic climate for poultry investment?
The economic climate is vibrant. The consistent development of the Mozambican economy, together with growth in many industries there, and a favourable investment climate created by government, allows the establishment of poultry production capacity in Mozambique. We believe that chicken, as an animal protein source, is the most affordable and sustainable form of animal protein in Africa. The development of and future expansion plans for Mozpintos are very much a part of Astral’s strategic African growth plan.
What is the per capita consumption of chicken in Mozambique and how much room for growth is there?
It is estimated at 2kg versus South Africa’s 35kg per person per annum. The importation of chicken is strictly controlled through a permit quota system with the intention to allow the local industry to develop. There is definitely room for growth due to increased economic activity in Mozambique.
Which customers does your Mozambican feed mill supply?
The feed mill provides feed to the local livestock producers and will also provide feed to the Mozpintos breeder farm.
What quantities of feed is Meadow Mozambique Limitada producing?
The Meadow animal feed operation in Maputo produces on average 12 000t of animal feed per year. The feed concentrates are imported from Meadow Feeds in South Africa while maize is sourced locally in Mozambique.
How did you access the land for the Mozpintos Hatchery?
Astral leased just over 25ha of land next to the Goba Dam, approximately 45km south-west of Maputo, in 2011. Mozambique currently makes use of a 100-year lease agreement where no property can be owned, only leased. Construction of the hatchery commenced in February 2012. This followed the successful registration of a comprehensive investment plan with the investment authorities in Mozambique for the establishment of the poultry operation.
Tell us about the facilities of the Mozpintos Hatchery.
It features the latest technology and adheres to international bio-security and safety standards. The initial capacity is 158 000 day-old chicks per week. Astral will be hatching the Ross 308 bird, which is well known to the Mozambique market and delivers excellent growth performance. There are already three poultry sheds on the farm that will be refurbished to house broiler breeders and in August 2012 the Astral Board approved plans to build three new broiler breeder sheds so as to no longer rely on the importation of hatching eggs from Astral’s National Chicks operation in South Africa.
How many small-scale and commercial farmers do you expect to supply?
We will supply in excess of 100 small-scale broiler farmers. There are no large-scale commercial broiler farmers in southern Mozambique.
Is Astral currently buying or growing its own broilers for processing?
No. However, this is part of the strategy, together with establishing a broiler processing plant/abattoir. Identifying suitable land to build the processing operation on is in progress. Through this we can supply the local market with affordable, quality, locally produced chicken. Astral is also in the final stages of registering a chicken consumer brand called ‘Festiva’, under which it plans to market processed chicken products in the future.
We believe we can continue to create job opportunities, deliver quality day-old chickens, and feed to the local broiler farmers, while also offering them training and support in terms of nutrition and broiler farming best practices, to ensure that the broiler market develops to its full potential.
Where will the Mozpintos staff come from?
We will be employing and training Mozambican workers in both the hatchery and at the breeder farm. We have already trained the Mozpintos management team at the National Chicks hatchery facilities.
What contribution do the African businesses make to Astral’s overall turnover?
As per the 2011 financial report, the African operations contributed 3% to group turnover. The indication is that this will consistently grow and the target is at least 10% over the next 10 years.
Contact Astral Foods on 012 667 5468 or email [email protected]