Publications
Partners
Cape Town - Agri-business giant Afgri is still keen to expand its poultry business despite a potential transaction with Sovereign Foods falling through earlier this year.
Afgri CEO Chris Venter told Fin24.com Afgri aimed to more than double its poultry capacity from 650 000 chicks per week to 1.7m chicks per week.
"We are currently operating at full capacity."
In results released on Wednesday Afgri reported an encouraging performance from its foods division (which includes animal feeds and oils) with revenue of R3bn transformed into pre-tax profit of nearly R170m for the year to end-June.
Afgri's poultry (or broiler) business - housed under Daybreak Farms - is relatively small, contributing less than 5% to the group's bottom line.
Venter highlighted the fact that the Daybreak Farms operation had been returned to profitability after a difficult 2008. He expected this performance to continue now that Daybreak Farms' processing facility had been matched to its production capacity.
"In the year ahead we are going to assess potential expansion opportunities in the poultry business, evaluate food processing opportunities and aim to increase market share within our strategic operating business areas."
While the recent tilt at Sovereign Foods was unsuccessful, Venter said Afgri was accessing a number of opportunities in the poultry sector.
Asked whether this meant Afgri would be buying up a multitude of smaller players rather than a single big poultry operation, Venter said Afgri envisaged a maximum of two transactions to shift production close to the targeted 1.7m birds per week.
"We hope to clinch these transactions before the end of this financial year."
Afgri would have no problem funding such poultry transactions with net cash of nearly R500m on hand. Net cash generated by operations during the year to end-June was a reassuring R875m.
- Fin24.com
