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SA's Pioneer, big plans for broiler business

South Africa's food giant Pioneer Foods has announced ambitions plans to grow its Western Cape-based poultry business into a national player.

Pioneer MD André Hanekom said the group's Tydstroom broiler business could go national in the longer term.

"Either we'd build this presence from scratch, or look to acquiring a small player," he said, adding that the company's egg business already operated its egg business on a national basis.

Fin24 reports that expansion for Pioneer's poultry division would make sense in the light of recent developments (involving Sovereign Food Investments, Afgri and Country Bird Holdings), which point to a consolidation in the local chicken industry.

But Hanekom stressed the immediate focus was on increasing profitability in the poultry business' key Western Cape market, adding that there were plans underway to increase capacity in the Cape Town plant, with another broiler farm expected shortly.

Ironically, the broiler business was the laggard in the interim period to end-March 2009. Pioneer's Agri Business segment - which includes chickens, eggs and feed - increased revenue 10% to R1.34 bln, but saw operating profit up only 8% to R41 mln.

Hanekom said a stronger performance from the egg business was offset by a disappointing performance from the broiler business.

He explained that challenging trading conditions in the broiler business prevented a proper recovery of increased costs.

Source: Fin24.com

Natalie Berkhout

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