The National Council of the Society for the Prevention of Cruelty to Animals (NSPCA) this week reported that more than 1 million birds had been abandoned and it had culled more than 200 000 birds at a Daybreak contract grower who was without feed for days, resulting in mass cannibalism.
Image: NSPCA
Banele Ginidza
Daybreak Foods has initiated a search for the Public Investment Corporation's (PIC) approval to enter Business Rescue, a decision prompted by mounting financial difficulties which have been exacerbated by a shocking culling of underfed poultry and protests from employees demanding their overdue salaries.
In an official response to Business Report on Wednesday, corporate affairs specialist Nokwazi Ngcongo confirmed that DayBreak Foods was grappling with significant financial constraints that have hindered its operational capabilities.
Recognising the critical juncture at which the company finds itself, the board is exploring avenues to implement business rescue, pending the active participation and agreement from shareholders.
"The Board has extensively communicated with the Public Investment Corporation (PIC), the company's shareholder, and made numerous requests for funding to support operations, including feed for birds and payment of salaries, and continues to engage the PIC in hope of a positive response," Ngcongo said.
The company has faced severe disruptions in its operations, resulting in an inability to meet its financial obligations, including staff payments and supplier settlements.
Ngcongo stressed that DayBreak Foods was fully aware of how these challenges impacted employees' livelihoods.
She also acknowledged recent challenges related to animal welfare at its poultry farming operations, including instances where birds went without feed due to financial constraints, resulting in cannibalism and subsequent culling.
Ngcongo said the company prioritized animal welfare, transparency, and accountability, and was working with the National Council of SPCAs to address these issues and ensure the highest standards of animal care.
"Currently, Daybreak Foods awaits a response from the PIC regarding the funding request and cannot commit to a specific date for employee salary payments," Ngcongo said.
"However, employee salaries remain a top priority for the company."
The National Council of the Society for the Prevention of Cruelty to Animals (NSPCA) this week reported that more than 1 million birds had been abandoned and it had culled more than 200 000 birds at a Daybreak contract grower who was without feed for days, resulting in mass cannibalism.
“The birds were over 28 days old but weighed under 700 grams. Daybreak Foods was contacted, and through urgent intervention, the NSPCA was granted consent to cull," it said.
"A poultry veterinarian also assessed the birds and confirmed they could not be salvaged. This resulted in approximately 200 000 birds being culled over two days,” the organisation said.
Hundreds of workers also protested outside the farm's premises demanding over due salaries.
According to sources from the previous executive team that resigned enmasse, the straw that broke the camel's back at the former Daybreak Farms was the PIC holding back on an approved R250 million debt deal to stabilise the company and further optimise its operations and balance sheet.
The deal, which was announced to much fanfare in April last year, was initiated by former CEO Richard Manzini, who resigned in February after he had made successful restructuring programme and the appointment of the new C-suite.
The cash raised would have been used for technology upgrades of Daybreak’s abattoirs and machines, a water treatment plant, and increasing the speed of the chicken processing systems added Manzini.
Daybreak Foods supplies its own and contracted broiler farms with day-old chicks, which are raised and sold as fresh and frozen whole chickens and portions.
The sources said the PIC failed to disburse the funds despite official commitments to do so, which led to the resignation of officials in the C-suite.
"I saw the documents that the money had been approved by myself but the PIC would not release the funds. Some of the executives felt compromised, they were ethical people," sources said.
Meanwhile, the PIC said in a statement that it was "deeply disturbed" by current reports of culling and cannibalism amongst the poultry stock of Daybreak Food’s farming operations.
The PIC said it continued to support Daybreak and has provided capital allocations to provide liquidity to the company, for the board and management to stabilise the business.
"The PIC is engaging its clients, the board of Daybreak and other stakeholders on an urgent basis to find a solution aimed at preserving the value of assets and, importantly, jobs in the company. The PIC’s interventions must be aligned to the investment mandates of its clients and meet the requirements of internal corporate governance and approval processes," it said.
"The board and management of Daybreak are responsible and accountable for the operations and finances of the company. Any intervention must also address longstanding governance and management concerns at the company."
BUSINESS REPORT