South Africa's RCL Foods relies less on frozen chicken sales

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  Andrea Gantz

  RCL Foods is shifting away from frozen chicken sales and relying more on smaller birds.

  From WATTAgNet:
  South African company RCL Foods has significantly reduced its reliance on low-profit frozen chicken by producing smaller birds that can be sold at higher prices to restaurants.
  Individually quick frozen (IQF) chicken products, sold to supermarkets, yield thin margins for domestic poultry producers, partly thanks to what the industry sees as "dumped" imports of cheap portions, the company said. Poultry producers make more money selling to fast-food chains, though they can only supply those customers with smaller birds that fit specific weight requirements.
  RCL Foods CEO Miles Dally said February 18 that his company, which produces poultry under its Rainbow Chicken brand, had reduced IQF volumes by about 40 percent by ensuring its birds were the right size.
  IQF now makes up less than 25 percent of Rainbow’s total volumes of about 5-million birds a week. Dally said RCL was producing lower volumes and smaller chickens, but with higher margins. "We’ve made massive strides" in terms of margins, he said.
  Margins in IQF would improve if import tariffs became effective and when the government enforced caps on the amount of brine water that can be injected into frozen chicken, Dally said.
  "We took a decision a while ago to cap our injection at a level that we thought was appropriate. We haven’t even felt the benefit of that yet, so we’ve had to try to do other things while we wait for the government to enforce this cap that they’ve agreed to," said Dally.