DAYBREAK FARMS: Leading Contributors to the Feather in SA’s Agricultural Cap

Approximately 3,500 employees staff the array of Daybreak Farms operations, which span Gauteng, Mpumalanga, Limpopo, and KwaZulu-Natal and enable it to produce a full gamut of poultry products. Daybreak Farms began life in 2001 as AFGRI Poultry, founded by the leading agricultural services company with core competencies to enhance, support and guide agricultural enterprise growth and the overarching strategic vision to drive food security across Africa.

Following well over a decade of notching up exactly this type of growth and progress, the company’s renaming came in June 2015 with its sale to AFPO, a BEE consortium led by Matome Maponya Investments and with the Public Investment Corporation (PIC) funding the acquisition. The resultant ownership equated to a 54% share held by AFPO Consortium, 36% by the PIC on behalf of its clients and the remaining 10% by employees and management.

Totalling in excess of R1 billion, the acquisition was lauded as a landmark transaction, creating the first significant black-owned enterprise in the agricultural sector. Agriculture remains a crucial element of the South African economy and is among its most important employment providers, especially in rural areas, while acting as a sustainable source of foreign exchange and inward investment. It comes as no surprise that it is estimated that more than 40% of South Africa’s total population is dependent on the industry in a meaningful way.

INDUSTRY HATCHES MASTERPLAN

“This transaction is agreed in the spirit of ensuring job stability for employees and as such no retrenchments or job losses are expected to take place,” assured Chris Venter, then-CEO of AFGRI. “This is an important undertaking for both parties. We are pleased with the transaction as AFPO will be a significant poultry producer in South Africa,” he added, as it paved the way to enable previously excluded groups to participate in the poultry industry, while contributing to food security and creating jobs.

“Today’s Daybreak Farms think differently and act boldly,” the company outlines. “We are so much more. At today’s Daybreak Farms, we’re not only ready for tomorrow, we’re leading the way today.” This mature, well-established and integrated poultry business processes more than a million birds per week, and has critical mass and a fully capitalised infrastructure which compares very favourably, in a competitive market, to South Africa’s other commercial suppliers of chicken. Indeed, the poultry and egg industry is the largest sub-sector of the South African agricultural sector, and represented 16.6% or R47.9 billion of the total gross value of 2018 agricultural production, and the largest animal production segment.

The numerous casualties during the avian flu outbreaks tested the industry almost to breaking point, while rioting in South Africa also had severe effects on the country’s poultry industry, causing supply chain disruptions, theft and struggles to get feed to the birds in live production.

Compounded by increased competition from imports and the challenges of chicken dumping and lockdowns, the industry stood strong with over R1 billion already having been invested into it on the back of the South African Poultry Association’s 2020 masterplan. An additional R400 million is to be invested throughout 2022, creating nearly 10% increased slaughter capacity and providing R343 million in finance to cover cashflow for black farmers.

“Although it was an arduous process, the material investments in expanding processing capacity and the construction and proliferation of poultry houses are yielding the desired results,” assessed Aziz Sulliman, South African Poultry Association chairperson. “We ended the year on a high note with the unexpected provisional dumping duties announced against Brazil, Ireland, Spain and Denmark. This is a watershed moment for the broiler industry as bone-in import volumes are expected to drop, and the industry may take up the market share in line with what was envisaged in the masterplan.”

NURTURING GROWTH

Daybreak Farms’s key activities today comprise the growing and processing of broilers into fresh as well as frozen whole birds, individually frozen birds and portions alongside abattoir and processing operations and sales and distribution. 33 independent contact growing sites  and eight in-house growers make up the company’s broiler division, across both Mpumalanga and Gauteng, to engender in every 34-day production cycle a capacity of over nine million broiler birds.

“Our story begins with the farm,” Daybreak Farms states., “It is an integral part of who we are and is where we are inspired, dream and embrace adventure – it brings us to life.” Combined, its Merinovlakte and Diepputten Breeder Farms cover more than 1,200 hectares in Bela Bela (Limpopo) and produce almost 10 million eggs per month. The Worthing Hatchery, among the country’s largest single hatcheries under one roof, houses 95 setters and 57 hatchers which benefit from the innovation of state-of-the-art Petersime incubators, and has a production capacity of nearly two million day old chicks per week.

“Today, we not only have the fastest growing protein-centric chicken brand, but we also offer greater transparency into everything we do,” Daybreak Farms summates. “Built on providing growing families with great-tasting and wholesome chicken products, Daybreak Farms prides itself on being part of the daily diets of many South Africans. We built our name on providing our communities with wholesome, great-tasting chicken. As values and behaviours around food have changed, so have we.

“We are innovators uniquely positioned to reshape what it means to feed our communities.” Forever forward-thinking, Daybreak Farms is now positioned to consolidate and stabilise, readying itself for the next phase of its dominance in South African poultry. The naming of its new CEO in May was key aspect of this process, as former Albany Bakeries Managing Director Matshela Seshibe was brought on board for a five-year term.

Seshibe is an experienced international business executive with direct experience in food and beverage industries, consumer goods manufacturing, sales and distribution, retail operations and beverage franchising and has held previous posts at Unilever, Tiger Brands and Shanduka, taking over from Jack Nkogatse who had been serving as acting CEO.

“We believe his strong leadership experience will help focus Daybreak Farms during its turnaround process and continue the Board’s work of returning the entity to operational stability,” enthused Lerato Nage, Chairman of the Board. To further stabilise operations, the poultry producer has additionally promoted Vangile Masisi to CFO, previously serving as the company’s Chartered Accountant.

“Daybreak’s leadership strives to not only build a successful company but enshrine values that grow our community too,” the company wraps up, with focus now set firmly on a prosperous future in an already burgeoning industry anticipating rising prices and declining imports. “We sustain our business and our communities for future generations. We nurture our business for growth and returns through commercial, operational and financial excellence, delivering superior value products to consumers and communities.”