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Municipality to buy Rainbow Chickens’ poultry farms

May 14 2017 06:33
Paddy Harper

In a bid to help workers and community members affected by the mass lay-offs at Rainbow Chickens – renamed RCL Foods – in Hammarsdale in KwaZulu-Natal, the eThekwini Municipality has offered to buy two of the RCL farms to produce free-range indigenous fowls for the local and regional market.

The city has offered RCL Foods – which laid off 1 350 workers and is selling 13 of its 25 farms in Hammarsdale and neighbouring Camperdown – R15 million for the Uitkomst and Doornrug chicken farms.

The decision to buy the farms, as part of the city’s newly adopted Radical Agrarian Socioeconomic Transformation Programme, was taken by a full council meeting on April 28.

The city supports several existing chicken and fresh produce farming cooperatives in its rural wards and the new farms will work with them, according to Thulani Nzama, the acting head of eThekwini Municipality’s business support, tourism and markets unit.

Nzama told City Press this week that the city was waiting for feedback from RCL on the offer to purchase and that he believed the legal and transfer process should take about four to six months, with occupation set to take place in December.

Nzama said the city was busy finalising an implementation and marketing plan for the business, which would be rolled out across rural wards and include the former RCL farms.

They would be run by a cooperative set up with assistance from the city.

The city would also meet with the Food and Allied Workers’ Union (Fawu), which represents the retrenched workers, to start preparations for the farms to go operational.

Nzama said they had been approached by some retrenched workers and had held an initial discussion with local union leaders about the skills that would be needed.

“The acquisition of the farm has not been discussed in detail with them, pending its finalisation,” he said.

Free-range indigenous chicken

“The local community, including experienced RCL staff who were retrenched, will be encouraged to establish the business entity which will enter into the lease agreement with the city and run the farm.”

Nzama said the city was also talking to chicken producers to supply them with free-range indigenous chicken.

It had started talks with government departments in the province – including correctional services, social development, education and health – to supply them with chicken so that the farm had markets as soon as production started next year.

“In the short to medium term, for example, key government departments will be targeted as potential markets for the chicken-meat and egg products, in line with the amended Public Finance Management Act.

“The medium- to long-term goal will be to supply retailers, and even export the chicken products, in keeping with the growing local and international market demand trends.”

Nzama said retrenched RCL staff had met with a cluster of government agencies to start setting up the cooperatives and getting them registered.

They were also being assisted in applying for additional funding from several institutions, including Ithala Bank.

Agrarian transformation

Nzama said the poultry industry had been identified by the city as a key area where its agrarian transformation programme could be implemented.

This to assist poor rural communities in the city and offset job losses sparked by RCL’s decision to cut down on chicken production and focus on the more lucrative value-added chicken products.

This week, Fawu was cautiously optimistic about the sale, but said it was in the dark about what was taking place beyond what had been written in the media.

Fawu general secretary Katishi Masemola said:

“We welcome the move by anyone, including the eThekwini Municipality, to buy farms, but we are cautious as to who will benefit.

"For now, we do not know who [will do so], but we still hope to be informed and involved in this process because we want retrenched workers to be represented as a majority shareholder.”

RCL spokesperson Glenda Sahadow was unavailable for comment.

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