PIC sells down Astral stake after chicken ban ends

Chicken producer Astral Foods has notified shareholders that South Africa’s largest asset manager, the Public Investment Corporation (PIC), has sold down its stake from 27% to 24%.

This comes after a ban on poultry imports from Brazil was recently lifted, enabling shipments to start entering South Africa again from about 10 days ago. Astral Foods produces several well-known chicken brands, including Goldi, County Fair, Festive, and Mountain Valley. They also market and distribute chicken products under the brand name Supa Star.

A ban on all poultry imports from Brazil was instituted some two months ago after an outbreak of avian influenza, which affected the supply of mechanically deboned meat (MDM) and chicken. MDM is the raw ingredient for polony and viennas and can now be shipped into South Africa again, after an eight-week suspension.

Astral does not manufacture MDM, although it is involved in the fresh and frozen chicken value chain – which were also banned until recently.

In a statement, Merlog Foods manager Georg Southey recently welcomed the lifting of the ban but warned that buffer stocks have been exhausted and the “effects of the shortage will be felt for months”.

In a statement Southey added that, “with ships at sea for 28 days or more, it will take at least six to eight weeks to ramp up production, restore shipping schedules, and replenish supply chains”.

The PIC, established in 1911, has assets under management of R2.7 trillion and investments in companies such as GOLDFields, Pan African, Aspen, and banks.

It controls over 10% of the market capitalisation of the JSE. The JSE’s All Share Index recently hit an all-time high of 100,000.

IOL