Sovereign Foods to boost poultry meat production

South African poultry group Sovereign Foods will invest ZAR60 million to meet rising demand for poultry meat, including the upgrading of a feed mill.

The expenditure will focus on completing the upgrade of the feed mill, expand cold storage capacity and purchase equipment needed to satisfy customer contracts, according to the group.

The capital expenditure will be incurred in the first half of the coming financial year and will be financed mainly from cash resources and operational cash flows, Sovereign Foods said.

In the financial year to February, the company spent ZAR248 million on capital expenditure, mostly on plant, property and equipment. This was funded by bank debt, which increased to ZAR549 million from ZAR317 million.

Sovereign Foods had also completed its ZAR62 million state-of-the-art hatchery with a weekly production rate of 900,000 birds that could produce up to two million birds per week in the long term.

The group was also about to complete its feed mill upgrade with a capacity to produce up to 20,000 tonnes of feed per month.

Sovereign Foods is the holding company of the principal operations within the broiler industry that cover breeding activities, broiler farming, food processing, animal feed milling and value-added poultry processing and trading.

US$1 = ZAR8.40101 (May 21)