Astral CEO blasts government priorities as water cuts halve production
Astral says worsening municipal infrastructure in the Lekwa municipality has led to water-supply interruptions at its plant there
The CEO of SA’s largest poultry producer lambasted the government on Monday, saying its failure to provide basic services threatens the survival of businesses.
Astral, which has a market capitalisation of R6.7bn, has halved production at its poultry processing plant because of water interruptions at the Lekwa municipality in Mpumalanga.
The interruptions have cost the group R85m in the period up to end-June, it said.
Getting companies such as Astral, the owner of consumer brands Goldi, County Fair and Festive, working at full capacity is vital to President Cyril Ramaphosa’s efforts to reinvigorate the economy, which has barely grown over the past decade.
“I am flabbergasted that government structures are fixated with the concepts of a fourth industrial revolution, and now bullet trains and mega-cities, while they are unable to provide basic services to existing companies such as Astral, and many other established and successful businesses,” Astral CEO Chris Schutte said.
Schutte said to heed Ramaphosa’s call to buy locally produced products, his municipalities should ensure basic services such as the supply of water are available.
“We are continuously bombarded with rhetoric about global competitiveness, the need for growth in rural agroprocessing, creating jobs in rural communities and ensuring food security, while Astral, the largest producer of affordable chicken in SA, is left to fend for itself with little more than a bucket-system supply of water,” he said.
Schutte said the company had no choice but to take legal action against the Lekwa municipality, saying it was the only avenue “to determine which tier of government — local, provincial or national — is ultimately accountable for the upkeep of municipal infrastructure. Though some plans have been forthcoming to resolve this water situation on a longer-term basis, Astral will not rest until it has been clearly determined who is ultimately responsible to execute such plans.”
Astral has said water interruptions in Lekwa were due to deteriorating infrastructure.
The company said the Standerton poultry processing facility, the largest such facility in Southern Africa, required 5.5 megalitres of water per day to process 2-million broilers a week.
“The undersupply of water escalated to the point where the municipality could not even supply the 4.0 megalitres per day secured by means of a mutually agreed court order, and with extremely limited communication from Lekwa in this regard,” the company said.
Astral said in light of the water crisis, the company has installed infrastructure on one of its poultry farms alongside the Vaal River in order to draw water.
“This water is pumped from the river and then transported by road to a filtration plant that has been established at the company’s premises in Standerton alongside the processing plant. This emergency arrangement is currently in operation while the parties are co-operating to secure a more suitable extraction point at the municipality’s water treatment works,” the company said.
Astral commercial business MD Andy Crocker said on Monday the alternative arrangements ensured the company had sufficient water to run its processing operations. “This will allow the staff at the abattoir to return to normal working hours and shift patterns as soon as possible,” he said.
The department of co-operative governance and traditional affairs was not immediately available for comment on Monday.