- South Africa’s power cuts, compounded by the bird flu outbreak, will cause chicken meat shortages in the coming months.
- Astral’s total costs of load shedding for the financial year would amount to approximately 1.9 billion rand (over $100 million).
Astral Foods, South Africa’s largest poultry company, has said the electricity crisis had disrupted the poultry industry and raised operating costs. The firm noted that this has been compounded by additional expenses related to the bird flu outbreak spread across South Africa’s Gauteng and Mpumalanga provinces.
Projections by Astral show that South Africa would face chicken meat shortages in the coming months due to the bird flu outbreak and electricity cuts ravaging the poultry industry. In a trading update, Astral said it expected to report a headline loss between 18.02 rand and 18.08 rand ($0.9564-$0.9596) per share in the year to September 30, compared to a profit of 27.62 rand last year, mainly due to persistent power cuts.
According to Astral, the bird flu has already caused short supplies of table eggs into the market. The firm projects that the supply of poultry meat into the value chain could be affected negatively in the coming months. Africa’s most advanced economy is enduring frequent electricity cuts blamed on its ageing coal-fired power generating plant fleet. State-owned utility Eskom is routinely reducing power supply to businesses and households for several hours daily, a process called load shedding locally.
The company said, “The total costs of load shedding, including capital costs of 200 million rand, for the group for the financial year, would amount to approximately 1.9 billion rand (over $100 million). This has been the main reason for the severe decline of Astral’s results for the year ending September 30 2023. Businesses have had to spend millions on alternative power sources, such as diesel generators and solar plants. For the poultry sector, erratic electricity supplies affect ventilation systems, slaughter schedules and chicken processing. Astral said it was spending 45 million rand (over $2.3 million) monthly to run diesel generators.