SOUTH AFRICA – One of South Africa’s biggest chicken producers is selling 15 of its 25 farms in Hammarsdale to stay afloat after fighting years of dumping by importers.
Because of the cutbacks Rainbow Chicken, renamed RCL Foods, is retrenching 1350 workers from the end of the month.
Mike’s Chickens (Limpopo), a family-run business in Polokwane for 38 years, has already closed, putting more than 1,000 people out of work.
Country Bird (Free State and North West), the country’s third biggest chicken producer behind Astral Foods (Mpumlanga, Gauteng, Western Cape and KZN) and RCL, is retrenching 1,500 workers.
Kevin Lovell, chief executive of the SA Poultry Association, said about 53,000 tons of chicken were imported last year – one and a third of what was produced annually by Astral Foods.
This week, Scott Pitman, managing director of RCL Foods, said he no longer knew what to do to save jobs.
“Letting 1,350 people go at the end of the month will be the saddest day in my career. How do you get rid of people who have given you loyal service, some as long as 40 years?” he asked
A bitter Pitman said the government was doing nothing to tighten import controls on frozen chicken, and the EU and Brazil, especially, were capitalising on this with large-scale dumping.
Pitman said European countries consumed mainly “white portions” (the breast), which they deemed to be the best cut.
The “brown portions” (the thighs and drumsticks) were then sold off at cut price – finding their way to developing world markets such as South Africa, where they were sold cheaper than what was locally produced.
“Our company’s troubles could end and jobs saved overnight if the government placed tighter regulations on imports,” said Pitman.
Nations like Russia, China, Nigeria and Kenya, put in measures to protect local producers and stop their countries from becoming dumping grounds.
Pitman said government officials were always talking about “job creation” but had done nothing to address this situation.
“If government doesn’t intervene soon, we will cut more jobs,” said Pitman.
Katishi Masemola, general secretary of the Food and Allied Workers’ Union (Fawu), also warned that if the government did not step in, members would embark on rolling mass action.
Masemola said the union’s fight was not with the chicken companies.
“The companies are the victims. We call on government to convene discussions with the EU and review their commitment on poultry issues.
“Fawu demands that government hikes import tariffs on chicken,” Masemola said.
Lovell said South Africa was Africa’s biggest chicken producer but also ranked among the world’s top 10 importers.
“The Ghanaian poultry industry has collapsed because of EU dumping. This is a form of post-colonial oppression,” he said.
Lovell said Brazil was the next biggest exporter to South Africa, while a smaller percentage of chicken came from the US.
But, Lovell said, less than half of the US quota hit local shelves because of its poor quality.
Alan Mukoki, chief executive of the SA Chamber of Commerce, said it was similar to what happened when Chinese textiles arrived.
“It decimated the SA textile industry. They not only brought cheaper textiles but its quality was inferior.”
Mukoki said they had raised their concerns with the Department of Trade and Industry.
Referring to RCL’s retrenchments, Mukoko said not only did it affect the 1350 workers but suppliers too.
“This is not good for anyone. These job losses will have a cascading effect.”
But economist Dawie Roodt held a different view. “The economy is not for producers or workers but for consumers. Products are made and sold to suit consumers.
“While workers may lose at times it is economically important for consumers to get the best deal.
“The problem in South Africa is that when we cannot compete with overseas countries we hike tariffs.
“What government should be doing is helping local producers by providing labour at lower rates, safe and reliable infrastructure, cheaper electricity and better roads. In that way costs will be lowered.”
When the KZN Department of Trade and Industry was approached for comment, sister publication the Sunday Tribune was referred to the KwaZulu-Natal Department of Economic Development and Environmental Affairs, but received no response before going to press.
January 8, 2016; Sunday Tribune