CHICK PRODUCERS’ ORGANISATION COMMITTEE

CHAIRPERSON’S REPORT 2014

Presented by Jaco Viljoen

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INTRODUCTION

• Industry slowly recovering from:▫ High input costs.

▫ Chicken imports.

• Good maize crop in 2013/14.

• Margins increased.

• SAPA forced to restructure:▫ CPO may be dissolved.

▫ Absorbed into Broiler and Egg Orgs.

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OBJECTIVES

• To foster, promote and improve the general welfare of those engaged in this sector of the poultry industry by providing a vehicle through which group action could be taken on matters of common concern.

• To promote and advance all matters relating to the improvement of the poultry breeding and chicken producing industry in South Africa.

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MEMBERSHIP AND COMMITTEE

• Currently 23 members in the CPO.

• Additional membership categories created for the fertile egg suppliers and day-old chick distributors.

• Jaco Viljoen (Chairperson)

• Ray Stanbury (Vice-Chairperson)

• Willie Bosoga

• Dr Petrus Engelbrecht

• Raymond Laing

• Humphrey Mncwango

• Jimmy Murray

• Koos Pretorius

• Jannie Serfontein

• Justice Zotwa

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INDUSTRY OVERVIEW: 2014

• Lower feed prices following three turbulent years.

• Reduced chick market due to closure of broiler farms.

• Delayed effect on SAPA:▫ Reduced financial contributions by members.

▫ Conflict over brining issues.

▫ Resignations by members.

• SAPA restructured and downsized.

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NEW SAPA

• Focus on transformation.

• Represent egg and broiler industries.

• Serve interests of all stakeholders.

• Confront challenges in poultry industry.

• In 2015, continue to work with government to protect industry from dumping and illegal imports.

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VOLUME AND GROWTHLayer breeders

• 24.43 million day-old pullets produced in 2014.▫ +2.4% y/y

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VOLUME AND GROWTHBroiler breeders

• Parent females in rearing: 3.5 million/week.▫ -0.04% y/y

• Average broiler breeder flock: 6.60 million hens ▫ -2.5% y/y

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VOLUME AND GROWTHBroiler chicks

• Day-old broiler chicks produced: 19.5 million/week

• Annual total: 1 016 million chicks▫ +2.5% y/y

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PROSPECTS FOR 2015

• Based on day-old female parent chicks placed to Dec. 2014:▫ Expect a 0.6% increase in day-old chicks hatched/week

to June 2015.

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FEED USAGE 2014

FEED (tons) Y/Y % change

Parent rearing 95 289 -0.05%

Parent laying 424 049 -2.50%

TOTAL 519 338 -2.06%

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INDUSTRY TURNOVER

• Egg industry – day-old pullets:▫ R177 million

▫ +6.4% y/y

• Broiler industry – day-old chicks:▫ R4.17 billion

▫ +7.7% y/y

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INPUT COSTS

• Breeder feed prices:

▫ Some relief in 2014, after above-inflation increases for 3 years.

2010 2011 2012 2013 2014

Avg. price (R/ton)

2 417.14 2 863.58 3 660.81 4 013.90 4 169.03

% change +18.5 +27.8 +9.7 +3.9

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5-YEAR TREND IN FEED PRICES

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PER CAPITA CONSUMPTION PER ANNUM

EGGS CHICKEN (kg)

2013 147 38.30

2014 139 37.96

% change -5.4% -0.9%

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EMPLOYMENT

CHICK PRODUCERS

FOR EGG INDUSTRY

CHICK PRODUCERS FOR BROILER

INDUSTRY

EMPLOYEES 683 14 471

• Based on 2012 survey.

• The chick industry is an important employer.

• Need to repeat survey.

• Important to monitor effects of imports and economic conditions on jobs.

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FINANCES

• The funding of SAPA is still a huge concern.

• All role players should see the benefits of an association like SAPA:▫ It has served them very well in the past;

▫ It will serve them in the future by helping to create an environment in which all stakeholders can thrive.

• The poultry industry should seriously consider the reinstatement of the levy.

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CHALLENGES

• High input costs in the 2015/16 season as a result of the severe drought.

• Resolving the funding mechanism to enable SAPA to continue serving the industry.

• Convincing all role players to become members of SAPA.

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FUTURE PROSPECTS

• The industry looks forward to the year ahead with much more confidence.

• There is definitely hope that business will turn for the better and allow the industry to recuperate and recover some of the losses of the past few years.

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CONCLUSION

• Thanks to:▫ The various role players who have ensured the

successful functioning of the Chick Producers’ Organisation.

▫ The committee members for their contribution to the organisation, and for helping with a new strategy for SAPA.

▫ To all SAPA staff members for your support of the Chick Producers’ Organisation.

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