{"id":823783,"date":"2025-05-12T20:10:55","date_gmt":"2025-05-12T18:10:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=823783"},"modified":"2025-05-12T20:10:55","modified_gmt":"2025-05-12T18:10:55","slug":"one-of-south-africas-most-important-food-producers-collapsing-in-front-of-everyones-eyes","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/823783\/one-of-south-africas-most-important-food-producers-collapsing-in-front-of-everyones-eyes\/","title":{"rendered":"One of South Africa’s most important food producers collapsing in front of everyone’s eyes"},"content":{"rendered":"\n

One of South Africa’s largest integrated poultry producers, Daybreak Foods is collapsing due to significant financial constraints.<\/p>\n\n\n\n

Daybreak Foods<\/a> is a South African poultry producer operating across Gauteng, Mpumalanga, Limpopo, and KwaZulu-Natal. <\/p>\n\n\n\n

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

The company was originally part of Afgri, a major agricultural services group. It was an established player in South Africa\u2019s poultry industry. <\/p>\n\n\n\n

Its operations included the entire poultry value chain, from breeding and hatcheries to broiler farming, feed milling, and chicken processing.<\/p>\n\n\n\n

This allowed the company to deliver fresh frozen chicken products to the local market, employing over 3,400 South Africans. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

In 2015, the Public Investment Corporation (PIC), South Africa\u2019s largest state-owned asset manager, acquired Daybreak Foods for R1.19 billion. <\/p>\n\n\n\n

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%). <\/p>\n\n\n\n

The PIC noted<\/a> the acquisition aligned with its mandate to support socio-economic development and transformation through strategic investments. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

\u201cThe investment advances transformation in the agriculture industry, one of the least transformed sectors in the country,\u201d said the PIC. <\/p>\n\n\n\n

At the time of the acquisition, Daybreak Foods was positioned as a strong, operationally sound business with solid market demand. <\/p>\n\n\n\n

The PIC expected the company to deliver financial returns and developmental impact through sustainable agribusiness growth, empowerment, and rural economic upliftment.<\/p>\n\n\n\n

These ambitions framed the rationale for the acquisition, before any signs of the financial and governance troubles that would follow in later years.<\/p>\n\n\n\n

The collapse of Daybreak Foods<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Daybreak Foods began experiencing significant financial difficulties in 2017, just two years after its acquisition by the PIC. <\/p>\n\n\n\n

The company struggled with market pressures, governance issues, and operational mismanagement, which exacerbated its financial challenges.<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

As a result of these issues, following the Competition Tribunal’s approval, the PIC assumed complete control of Daybreak Foods in 2017.<\/p>\n\n\n\n

Despite efforts to stabilise the company, including board overhauls and management changes, Daybreak’s situation worsened. <\/p>\n\n\n\n

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

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

In April 2025, the National Council of Societies for Preventing Cruelty to Animals (NSPCA) flagged Daybreak Foods\u2019 farms. <\/p>\n\n\n\n

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. <\/p>\n\n\n\n

The NSPCA intervened, euthanising the affected birds and initiating legal action against Daybreak’s management for animal cruelty.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

R176 million was provided in February 2025, with the remaining R74 million to be allocated to provide immediate working capital.<\/p>\n\n\n\n

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

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. <\/p>\n\n\n\n

On Sunday, the Department of Employment and Labour also expressed alarm at reports of Daybreak\u2019s collapse, as it concerns the CF and UIF.<\/p>\n\n\n\n

\u201cThe 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,\u201d the department said.<\/p>\n\n\n\n

A spokesperson also confirmed<\/a> that the department is \u201cengaging with the PIC to seek clarity on the status of this investment\u201d. <\/p>\n\n\n\n

It added that the department would take \u201cappropriate measures to protect the interests of stakeholders and ensure accountability\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

One of South Africa\u2019s largest integrated poultry producers, Daybreak Foods, is collapsing due to significant financial constraints.<\/p>\n","protected":false},"author":92,"featured_media":823815,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[22522,22518,2994,22204,853],"class_list":["post-823783","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-afgri","tag-daybreak-foods","tag-pic","tag-public-investment-corporation-pic","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=823783"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823783\/revisions"}],"predecessor-version":[{"id":823853,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/823783\/revisions\/823853"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/823815"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=823783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=823783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=823783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}