Skip to main content

Cheap chicken, sugar imports hit RCL Foods

| Economic factors

RCL Foods is appealing to the SA government to limit cheap imports of chicken and sugar after an influx from the Americas weighed on the local producer.

South Africa is an easy target, with “pretty porous” borders and generous tariffs, Chief Financial Officer Rob Field said by phone on Monday. The Durban-based company is “a highly efficient producer, so there’s no issue with supplying the local market at the volume that is required and at a price that is internationally competitive,” he said.

RCL Foods, which makes Sunbake bread, Selati sugar and Rainbow chicken, is also striving to recover from the effects of a drought and a deadly listeriosis crisis that eroded trust in its processed meat even though its own plants were not a source of the disease.

The issues with chicken and sugar compounded those challenges, sending earnings, excluding some items, down 26% in the six months through December.

“No market can sustain itself when you have dumped imports - and to the extent that they are coming in,” the CFO said. “Chicken and sugar saw 500 000 tons of each of those products coming into our market and displacing local production.”

RCL is in talks with local government to “find a way to level the playing field,” Field added.

RCL has invested in additional safety measures as the company seeks ways to regain consumer trust after the listeriosis outbreak, Field said.

The stock, which has dropped 19% in the past year, pared the decline by climbing 7.5% by 12:00, valuing RCL at R13bn. 

Pin It

Related Articles

South Africans are resilient people who are always ready to seek solutions for problems, even if the trials they face are caused by events that are beyond their control. An empowering example of this approach to life is the use of grocery stokvels...
In response to rising food costs, The SPAR Group offers practical tips for beating food inflation through savvy shopping and creative cooking.
By: Myles Illidge – MyBroadband South Africa’s Road Accident Fund (RAF) tax and General Fuel Levy (GFL) add between R272 and R483 to the price of a tank of fuel, depending on the size of your car’s tank.
By: Shaun Jacobs – Daily Investor Major changes are coming to VAT in South Africa, with the government looking to expand the range of food items exempt from the tax. 
By: Hanno Labuschagne - MyBroadband An anticipated strengthening of the rand and slipping global oil prices could result in lower petrol prices at the pumps next month.