SOUTH AFRICA- In a tumultuous year for South Africa’s poultry industry, Quantum Foods, a prominent player in the sector, has reported a staggering net loss of 35.5 million rand (US$1.89 million) at the close of its fiscal year on September 30, 2023.
This marked a stark contrast from the previous year when the company boasted a net profit of 23.8 million rand (US$1.2 million).
The poultry sector in South Africa is grappling with multiple challenges, primarily attributed to the outbreak of bird flu and disruptions in electricity supplies.
Quantum Foods, based in Wellington in the Western Cape province and listed on the Johannesburg Stock Exchange (JSE), has been severely affected by these factors, leading to significant economic losses.
The avian flu epidemic has wreaked havoc on Quantum Foods’ operations, resulting in the loss of nearly 2 million chickens, valued at 106 million rand (US$5.63 million).
The company disclosed that 1.5 million laying and breeding birds succumbed to the current bird flu outbreak, with an additional 420,000 laying chickens lost during an earlier wave of infections in April.
The high-pathogenic avian influenza (HPAI) outbreak, characterized by rapid transmission and high mortality rates in infected flocks, prompted the culling of about one-third of South Africa’s national flock.
In addition, Quantum Foods, responding to the challenges posed by the bird flu and ongoing electricity crisis in the country, invested 87 million rand (US$4.6 million) in acquiring new electric generators and purchasing diesel to ensure uninterrupted operations.
The losses incurred due to the avian flu extend beyond the immediate costs, including 155 million rand (US$8.3 million) for the loss of laying hens and breeding animals.
This amount excludes additional expenses related to the destruction of feed and eggs, removal of birds, and disinfection of facilities.
Furthermore, the company had to incur additional costs to relocate eggs from areas affected by HPAI, resulting in a significant impact on potential income from the sale of birds and eggs.
Quantum Foods, which also operates in Zambia, Uganda, and Mozambique, disclosed its financial woes amid a broader industry crisis.
Other major players in the South African poultry sector, including RCL Foods and Astral Foods, have reported substantial losses.
Astral Foods, for instance, swung to a full-year loss, attributing it to the electricity crisis and the bird flu outbreak, with the company reporting an operating loss of R621 million for the full year ended September 30.
While the government has asserted control over the bird flu outbreak, the ripple effects are still being felt by poultry producers, leaving the industry grappling with economic challenges, rising costs, and fears of a shortage of table eggs and meat.
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