‘Collapsing municipality’ costs Astral Foods R85m, threatens jobs
The poultry producer says it has incurred multimillion-rand costs as Lekwa Municipality cannot render reliable water supply
Astral Foods, SA’s largest poultry producer, on Tuesday flagged how collapsing municipalities were hurting business and the economy, saying a water-supply problem in one town had cost the company at least R85m in profit and could threaten jobs. In an update to shareholders on Tuesday, Astral, which has a market capitalisation of R7bn and owns the County Fair and Goldi brands, blamed the Lekwa Municipality in Standerton, Mpumalanga, for failing to render reliable water services, saying this was threatening its poultry operations. Astral shares traded 10.7% lower on Tuesday morning — the biggest fall in more than 18 years — before they recovered to close 4.33% lower at R163.97. Andy Crocker, MD of Astral’s poultry commercial business, said the water-supply problem had significant cost implications for the group. The company said the total effect on profits had been at least R85m. In the year to September 30, Astral’s net profit was R1.43bn. Astral blamed the water interruptions on det...