Overview of Poultry Business Performance and Success Factors in March 2015
In March 2015, detailed insights were shared regarding the performance and key aspects of various segments within the poultry business, including sales turnover, market share, geographical spread, and success factors influencing the industry. The data covers entities like Nova Feeds, Nulaid Eggs, Broiler Business, and Africa Outside South Africa. Additionally, economic factors impacting the industry, such as commodity prices, exchange rates, egg prices, and feed prices, were highlighted. The information provides a comprehensive view of the poultry business landscape in the specified period.
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BUSINESS COMPOSITION 2 Rm turnover 2014 % Animal Feed 1 241 34,8 Layers 1 087 30,5 Broilers 1 081 30,4 Africa 152 4,3 QuantumFoods 3 561 100
NOVA FEEDS 3 Pretoria 34% Malmesbury 52% 42% sales to external market CAGR for external sales volumes for period 2010-2014 is 6.7% Leading supplier of diary feed in Western Cape Ability to pass though raw material price changes Superior technical input with custom mixes are key success factors George 14%
NULAID EGGS 4 Integrated business from grand parent level to pack stations BREEDING COMMERCIAL SALES GP Rearing Pack Station Parents Ungraded Transfer Transfer Laying Liquid Egg Hatchery Quantum Foods sell the equivalent of over 1 billion eggs per annum Day old pullet sales Point of lay sales 90% of eggs sold are produced by own farms One of only three suppliers of pullets Geographical spread of farms Nulaid brand commands a premium
BROILER BUSINESS 5 BREEDING COMMERCIAL GP Sales to Others Retail & Wholesale Rearing Transfer Parents Own Abattoir Hatchery Significant re-engineering to stop losses Exit Eastern Cape market Closure of two abattoirs Live bird supply agreement in Western Cape Western Cape business essentially a livestock farming business Gauteng business remain fully integrated 560 000 broilers per week Western Cape 250 000 broilers per week Gauteng
AFRICA OUTSIDE SOUTH AFRICA 6 UGANDA Broiler and layer breeding Feed mixing plant ZAMBIA Broiler and layer breeding Commercial egg farm in Copperbelt Feed mixing plant Significant contributor to profits during 2013 and 2014
SUCCESS FACTORS 7 Economic factors Commodity prices 1 Maize (refer to slide 11) Soybean meal 2 ZAR/US$ Exchange rate (refer to slide 12) 3 Egg prices Egg cycle of supply and demand (refer to slide 13) Feed prices 4 Broiler meat prices Trade regime Domestic supply and demand Feed prices
OPERATIONAL FACTORS 8 Feed Conversion Ratio ( FCR ) both layers and broilers 1 Eggs per hen housed 2 Lowest cost of production throughout value chains 3 Disease status of national flocks 4
9 FINANCIAL DRIVERS AND SENSITIVITIES 2015 Impact per annum Operating profit Change in Current Level Rm Maize price of R100/ton R2500 11 Soybean meal price of R100/ton R5800 3 R10.29 . Egg selling price of 10c per doz 8 . Broiler meat selling price of 10c per kg R18.49 2 FCR change in broilers (one gram) 1.65 kg 2,8 FCR change in layers (one gram) 1.65 kg 2,3 One additional egg per hen housed 290 eggs 2 SAPA November 2014 report SAPA November 2014 report Breed targets
STRATEGY 10 3 2 1 Grow selected markets Reducing cyclicality Improve margins 1. Western Cape de-risking of boiler business 2. Review Hartebees abattoir 3. Improve Customer and Product mix in Egg business 4. Increase Africa geographic footprint 1. Improvement of farm operations Broiler FCR close to optimum Layer FCR and eggs per hen housed can improve by at least 2.5% 2. Cost efficiency in pack stations 3. Consolidated supply chain efforts 4. Utilize import opportunities for maize 5. Pack station project KZN 1. Organic growth in feed business 2. Acquisitive growth in feed business 3. Off balance sheet growth in egg business 4. Growth in current Africa operations 5. Grow the layer livestock business
ECONOMIC FACTORS: MAIZE 11 3500 R2,377 R2,380 3000 R2,069 R2,264 2500 R1,672 2000 +5.03% R1,278 R/ton +42.34 1500 -12.98% -4.87% +30.80% 1000 -15.70% 500 0 2011 2013 2014 2015 2012 2010 2010 - 2014 Reporting period: Oct - Sep 2015 Reporting period: Oct - Febr Yellow Maize (Safex)
ECONOMIC FACTORS: EXCHANGE RATE 12 12 R11.3085 11.5 R10.6037 11 +6.65% 10.5 R9.2888 10 +14.16% 9.5 9 R8.0729 8.5 Rand R7.4865 +15.06% 8 R6.9697 7.5 7 +15.83% -17.39% 6.5 -6.90% 6 5.5 2014 2015 2011 2013 2012 2010 ZAR vs US$
13 Source: SAPA
