August 30, 2018
South Africa's Sovereign Foods inks empowerment deal with Cultiver Investments
Sovereign Foods, South Africa's third-largest producer of frozen, fresh and value-added poultry products, has entered into an empowerment transaction with Cultiver Investments (Pty) Ltd, a black economic empowerment (BEE) agricultural company, it was announced, as reported in The Poultry Site.
Under the deal, Sovereign Foods said it has signed a preferential procurement off-take agreement for day-old chicks hatched and reared by Cultiver on its farms in Limpopo province. Sovereign will further lend management support, farming skills transfer, and credit facilities to Cultiver.
Cultiver will lease breeder and hatchery operations outside Mokopane and a broiler farm outside Polokwane in Limpopo.
Sovereign said Cultiver can potentially realise a turnover of 659 million South African rand (US$45.9 million) over the next 10 years, paving the way for Cultiver to become one of South Africa's largest fully black-owned poultry hatching and rearing operations in South Africa over the next three years.
"We are pleased to announce a 10-year procurement deal, management support and skills transferal programme, and various other support mechanisms for an empowerment deal with Cultiver," said Chris Coombes, CEO of Sovereign Foods.
Cultiver Director Muzi Twala explained that Cultiver will retain its existing ownership structure and operate independently from Sovereign Foods.
"However, we will remain in very close orbit to Sovereign to access its knowledge, R&D and best practices in relation to day-old chick and broiler production", Twala added.
Twala also announced that Cultiver had obtained 125,000 breeder birds from Sovereign Foods and that placement of additional parent stock at its Polokwane farms was well underway.
"This will enable Cultiver to produce approximately 342,000 hatching eggs per week from which 285,000 day-old chicks will be hatched per week. This, in turn, will result in an output of 23,000 tonnes of broiler meat per annum", he said.
