South Africa’s RCL Foods has revealed its Rainbow poultry unit has had to cull 410,000 chickens as a result of the country’s avian flu outbreak.
In an announcement today (28 September) on the Johannesburg Stock Exchange (JSE), RCL Foods said the cull has resulted in an estimated financial impact of R115m ($6m).
The outbreak of the disease and the resulting cull have led to fears that South Africa may face a shortage of chicken meat and eggs.
In a fast-moving crisis, Namibia this week suspended poultry imports from neighbouring South Africa, citing the bird flu outbreak.
RCL Foods said in its JSE statement: “The outbreak has affected 11 of our 19 sites in the inland region, which is one of three regions in which this business operates. The outbreak has moved at a rapid pace and the situation is constantly evolving.”
It said Rainbow is taking 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.
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“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,” the company added.
Rainbow is one of South Africa’s largest chicken producers, supplying retailers and foodservice businesses.
It is the latest blow for RCL Foods, which also manufactures bakery products and pet-food. Like other South African food manufacturers, it has been forced to invest in alternative energy sources to keep their business going against a backdrop of rolling power blackouts – or load shedding – in the country as the government attempts to tackle an ongoing energy crisis.
In addition, food manufacturers have had to pay a sugar levy imposed by the South African Sugar Association to cover a shortfall linked to business rescue proceedings at industry players Tongaat Hulett Sugar and Gledhoe Sugar Co. and are facing inflationary pressures in their supply chains.
Earlier this month, saying it had “weathered a tremendously difficult 12 months”, RCL Foods revealed its annual profits had plummeted by 45% year-on-year.
For the year ending June 2023, the company reported headline earnings per share (HEPS) from continuing operations – a closely-watched profit measure in the country – of 60.6 cents, down from 111.5 cents a year earlier. EBITDA was down 24.5% at R1.71bn.
The South African government declared a state of emergency in February, with President Cyril Ramaphosa pledging to “dramatically reduce” the power blackouts.