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Astral plans for African expansion, Feed milling

Published on 15 March, 2010, Last updated at 03:14 GMT
Astral plans for African expansion, Feed milling

Broiler and animal feed producer Astral Foods said on Monday it has targeted more growth opportunities in Africa.

Among other countries, Astral has identified Zambia, Mozambique, Botswana and Zimbabwe as focus areas within the southern African region.

The group already has animal feed operations in Zambia and Mozambique. It also has chicken operations in Swaziland.

Astral spent R22m last year to establish a greenfield poultry operation in Zambia.

Group CEO Chris Schutte said Astral plans to make Zambia a regional hub for its operations outside SA. Schutte said Zambia is "an extremely stable country" with "good agricultural soil" which will enable the envisaged growth.

Mozambique's close proximity to the group's operations (mainly in Gauteng, Mpumalanga and KwaZulu-Natal), the country's growing population and a "good harbour" made it an obvious market to tap into, said Schutte.

However, Astral's continental expansion would be approached conservatively, Schutte said, due to "uncertainties" in those markets. For instance, although Zambia is a stable country, it is largely a single commodity (copper) based economy, he said. There were also infrastructural challenges which could cause logistical difficulties.

"We want to be involved in feed milling before we get into poultry farming," said Schutte of the group's Africa strategy.

Schutte also said Astral will, during the second half of this year, open a "new state of the art bakery" in the Western Cape - a R70m joint venture with US-based industrial bakers East Balt.

Although this does not look a natural fit within the group - whose strategy is to become an integrated low-cost poultry operator - Schutte said the bakery venture is nonetheless a good business opportunity.

The benefit of low input costs has seen poultry prices going down to around R15 per kilogram, said Shutte, adding that the poultry division had good prospects for the year, with Easter and the 2010 Fifa World Cup expected to boost the group's short-term poultry sales.


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