ANTHONY CLARK: In (mostly) fine feather
Quantum’s restructuring has reduced risk volatility in all divisions but its eggs business
Which came first: the chicken or the egg? The answer, in Quantum Foods’ case, is both. The unbundling of Quantum from Pioneer Foods in October 2014 proved to be the making of the company, as management was allowed to allocate capital and start de-risking the business. With interests in animal feed and eggs (via market leader NuLaid), and as a small to mid-sized chicken producer under the Tydstroom brand, Quantum was often at the mercy of the market in terms of input pricing for soft commodities and the poultry price. This led to extreme profit volatility. So it was no wonder that Pioneer Foods wanted shot of its small agricultural division. Over the past three years, management has restructured Quantum, invested in expanding the earnings base of animal feed, and invested about R250m in egg operations in selected African countries. A key move was selling Tydstroom to become a contract rearer of broilers for Astral Foods and Sovereign Foods. Though the company lost much of the future ...
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