One of South Africa’s most important food producers collapsing in front of everyone’s eyes

One of South Africa’s largest integrated poultry producers, Daybreak Foods is collapsing due to significant financial constraints.

Daybreak Foods is a South African poultry producer operating across Gauteng, Mpumalanga, Limpopo, and KwaZulu-Natal. 

Established in 2001, the company grew to become one of the country’s largest poultry producers, supplying fresh and frozen chicken products. 

The company was originally part of Afgri, a major agricultural services group. It was an established player in South Africa’s poultry industry. 

Its operations included the entire poultry value chain, from breeding and hatcheries to broiler farming, feed milling, and chicken processing.

This allowed the company to deliver fresh frozen chicken products to the local market, employing over 3,400 South Africans. 

At peak capacity, the business could produce approximately nine million birds per cycle of 34 days, making it one of the largest poultry producers in the country.

In 2015, the Public Investment Corporation (PIC), South Africa’s largest state-owned asset manager, acquired Daybreak Foods for R1.19 billion. 

The shareholding was split evenly among the Government Employees Pension Fund (33.3%), the Compensation Fund (33.3%), and the Unemployment Insurance Fund (33.3%). 

The PIC noted the acquisition aligned with its mandate to support socio-economic development and transformation through strategic investments. 

The acquisition aimed to increase black ownership and participation in the agricultural sector, enhance food security, and contribute to job creation, especially in rural areas.

“The investment advances transformation in the agriculture industry, one of the least transformed sectors in the country,” said the PIC. 

At the time of the acquisition, Daybreak Foods was positioned as a strong, operationally sound business with solid market demand. 

The PIC expected the company to deliver financial returns and developmental impact through sustainable agribusiness growth, empowerment, and rural economic upliftment.

These ambitions framed the rationale for the acquisition, before any signs of the financial and governance troubles that would follow in later years.

The collapse of Daybreak Foods

Daybreak Foods began experiencing significant financial difficulties in 2017, just two years after its acquisition by the PIC. 

The company struggled with market pressures, governance issues, and operational mismanagement, which exacerbated its financial challenges.

This came at a time when the poultry industry was struggling with increased competition from imported chicken, which was often sold at lower prices, thereby undermining local producers, including Daybreak Foods. 

As a result of these issues, following the Competition Tribunal’s approval, the PIC assumed complete control of Daybreak Foods in 2017.

Despite efforts to stabilise the company, including board overhauls and management changes, Daybreak’s situation worsened. 

By the end of 2024, the company was facing severe liquidity issues, failing to pay suppliers and staff salaries, which continued into 2025.  

Shoprite extended a R100 million loan to Daybreak, which remained unpaid by February 2025, while other suppliers also threatened liquidation over unpaid debts.

In April 2025, the National Council of Societies for Preventing Cruelty to Animals (NSPCA) flagged Daybreak Foods’ farms. 

Bloomberg reported that the NSPCA discovered that approximately 350,000 chickens at Daybreak’s farms were starving due to the company’s inability to supply sufficient feed. 

The NSPCA intervened, euthanising the affected birds and initiating legal action against Daybreak’s management for animal cruelty.

In response to the crisis, the PIC confirmed on Friday, 9 May 2025, that it had lent R250 million to ailing poultry producers to bolster their operations and balance sheets.

R176 million was provided in February 2025, with the remaining R74 million to be allocated to provide immediate working capital.

Initially intended for long-term improvements, the funding was redirected to cover essential expenses, including staff salaries for April and livestock feed.

However, despite the cash injection, Daybreak Foods is still facing collapse. Before announcing the R74 million lifeline, the poultry producer sought approval to enter into business rescue. 

On Sunday, the Department of Employment and Labour also expressed alarm at reports of Daybreak’s collapse, as it concerns the CF and UIF.

“The CF and the UIF are committed to ensuring that all investments made on their behalf align with their investment policies and deliver sustainable, long-term returns,” the department said.

A spokesperson also confirmed that the department is “engaging with the PIC to seek clarity on the status of this investment”. 

It added that the department would take “appropriate measures to protect the interests of stakeholders and ensure accountability”.