Cosatu extremely concerned about crises at Daybreak

Poultry producer Daybreak's financial troubles came home to roost this past week as the company undertook a shocking culling of underfed poultry and workers protesting after not being paid salaries. 

In an effort to alleviate troubles, Daybreak Foods initiated a search for the Public Investment Corporation's (PIC) approval to enter Business Rescue.

This past Wednesday, corporate affairs specialist Nokwazi Ngcongo confirmed to Business Report that DayBreak Foods was grappling with significant financial constraints that have hindered its operational capabilities.

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.

On Friday, trade union Cosatu said they are concerned about the crisis at the company. 

Cosatu said in a statement, "Cosatu and our affiliate representing workers at Daybreak, Sactwu, are extremely concerned about the crisis at the company. Many of these have been going not only for the past few months but in fact years. Daybreak and its employees have been subjected to systemic failures by several iterations of management."

"We are seeking urgent measures by the PIC as the owners of Daybreak, as well as the investment fund manager of workers’ funds. The situation is intolerable and must be dealt with, not only to resolve the immediate crisis but also to ensure the company is placed on a sustainable path long term," Cosatu further said. 

The company faced severe disruptions in its operations, resulting in an inability to meet its financial obligations, including staff payments and supplier settlements.

Animal cruelty 

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 overdue salaries.

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."

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.

BUSINESS REPORT