ANTHONY CLARK: These shares may one day soar
The key to Astral’s expansion, I believe, is that the list of zero-rated items may be changed
It was only a few years ago that the domestic poultry sector was calling "fowl", saying that its business was being severely damaged by external factors.SA was being flooded by cheap, tariff-free chicken from the EU, with Brazil also happily "dumping" excess product.And to roast the local poultry sector further, the renewal of the US free trade agreement Agoa allowed US poultry producers to land 65,000t of chicken in domestic markets.With a severe drought hitting the agricultural sector in 2016, the price of maize — the key input feed cost to rearing poultry — soared to R5,000/t, and domestic poultry companies were hit by sharply higher costs.In this "fowl" environment some small-to mid-sized poultry stocks fell off their perches and closed down, or were acquired.Sovereign Foods was taken over by private equity, Rainbow Chickens cut back production and closed some operations.Astral took some key businesses and became the largest sector player.In 2016, the company’s poultry profit di...
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