Picture: REUTERS
Picture: REUTERS

SA’s plans to raise tariffs on chicken imports are likely to bring relief to RCL Foods, one of the country’s producers affected by the lower cost of meat coming from the US and Brazil.

RCL, which makes Sunbake bread, Selati sugar and Rainbow chicken, is part of an industry body that applied for measures to counter underpriced poultry imports that cost the local industry R6.5bn in annual losses.

While trade & industry minister Ebrahim Patel agreed to the new levies late in 2019, they have not yet been published in the Government Gazette.

“Our contention is that those are dumped imports which are having a very depressing effect across the market,” RCL CFO Rob Field said on Monday.

The Durban-based company has also lost some of its long-standing business with Yum! Brands’s KFC, he said, as the owner of the fried-chicken outlets is bringing in more suppliers.

SA imported 383,000 tonnes of chicken in 2018, excluding mechanically deboned meat used to make processed food such as sausages, government data show. That’s about 19% of total supply.

RCL’s headline earnings per share fell 2.3% in the six months through December, while like-for-like earnings, which exclude one-off material items, rose 23%.

The shares fell 5.2% to R10.40.  

RCL said the chicken unit may also get a boost from the company’s effort to get more energy from renewable resources, and has commissioned a second plant that can convert waste to power from the last quarter of the financial year.

Sentiment in SA’s manufacturing industry fell to the lowest level in more than a decade in February as the prospect of continued power cuts weighed on confidence.


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