AGRICULTURAL JOB CREATION IN THE POULTRY INDUSTRY. PRESENTED BY: Kevin Lovell CEO of SAPA
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1 AGRICULTURAL JOB CREATION IN THE POULTRY INDUSTRY PRESENTED BY: Kevin Lovell CEO of SAPA ON: 19 April 2011 Small Footprint. Big Impact.
2 THE POULTRY INDUSTRY SPANS FROM FARM TO FORK... via complex supply chains
3 THE POULTRY INDUSTRY SPANS FROM FARM TO FORK... Primary producers Processors Distributors Two distinct industries Egg production Meat production
4 THE POULTRY INDUSTRY: EGG INDUSTRY The South African egg industry expanded by 34,6% between 2000 and The compounded growth over the period was 3,16% per annum. Most of the expansion in the egg industry occurred after 2004 when egg production increased by 31,3% over three years. The economic downswing and increasing input costs and severe pressure on profit margins forced the egg industry to reduce hen numbers. Not a mature industry- eat about 40% of some developing countries levels Demand needs driving- no real egg eating habit
5 THE POULTRY INDUSTRY: EGG INDUSTRY SOUTH AFRICAN EGG INDUSTRY : EGG PRODUCTION (Cases of 30 Dozen and Tons of eggs) 19,000, ,000 18,000, ,000 C A S E S 17,000,000 16,000,000 15,000, , , ,000 T O N S 14,000, ,000 13,000, , YEAR 30 Dozen cases / tons of eggs
6 THE POULTRY INDUSTRY: BROILER INDUSTRY Over the decade, the number of day old broiler chicks placed has increased by 44% while the number of broilers slaughtered has increased by 45,3% due to improved productivity. The average compound growth in broiler production over the ten years was 3,9% per annum. The period of continued growth in broiler production from 2004 to 2007 was supported by increased demand, relatively low input costs and a favorable Rand/Dollar exchange rate. The downswing in the economy and the associated reduction in disposable income resulted in a decrease in demand for products and lower profit margins. Not a mature industry- at least 50% volume increase possible Latent demand
7 THE POULTRY INDUSTRY: BROILER INDUSTRY BROILER PRODUCTION PER ANNUM 1,050,000,000 1,000,000, ,000, ,000,000 B I R D S 850,000, ,000, ,000, ,000, ,000, ,000, YEAR Broiler chicks placed Broilers produced
8 THE POULTRY INDUSTRY...The Future Per capita consumption of meat and eggs relatively low in comparison with other countries Poultry industry potentially set to grow by approximately four percent per annum in the long term Depends on: South Africa s economic growth and the poultry industry s ability to remain competitive in the global market and reliable and affordable sources of grain and grain byproducts
9 THE POULTRY INDUSTRY...The Future
10 THE POULTRY INDUSTRY...The Future Mixture of farm and town employment Generally more town employment Could add ca jobs in meat production Could add ca jobs in egg production Depends on: South Africa s economic growth and the poultry industry s ability to remain competitive in the global market and reliable and affordable sources of grain and grain byproducts
11 THE POULTRY INDUSTRY...Effect of imports Equivalent of 5,5 million chickens per week imported Equal to 9300 lost jobs excluding any jobs in grain production and other suppliers. Tariff framework would allow for more local production Bound rate 80% and applied rate generally 27%
12 THE POULTRY INDUSTRY...Employment structure
13 RECENT TRENDS ON EMPLOYMENT IN THE POULTRY INDUSTRY
14 MAJOR CONSTRAINTS EXPERIENCED AND THE SUPPORT REQUIRED BY THE INDUSTRY TO MAXIMISE THE CREATION OF NEW JOBS Labour laws Farm tenancy laws Trade policy State support for small farmer growth
15 THIS CONCLUDES AGRICULTURAL JOB CREATION IN THE POULTRY INDUSTRY By Mr Kevin Lovell Small Footprint. Big Impact. A new era
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