Assessment of Cooperatives in the Poultry Industry - 2013.pdf - Seda

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2013 Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives and Collectively Owned Enterprises in the Poultry and Related Industries 2. Overview of the South African Poultry Industry 2.1. Introduction This section provides an overview of the domestic poultry industry within South Africa. In order to understand the environment in which cooperatives do business, it is necessary to understand the market as a whole. This enables insight into where opportunities may lie. The poultry industry is also dominated, in some parts of production, by commercial producers. Identifying where small business is more prominent will illustrate where there is greater potential, while at the same time showing where small business may be able to leverage off large business. The industry value-chain produced in this section adds to this by illustrating how role-players participate in the various functions which feed into, supplement and result from the poultry production process. The poultry industry is broken into two main sub-sectors: broiler production and egg production. This overview will make a distinction between the two sub-sectors when providing statistics as each sub-sector has a very different set of information. The market overview is based on information from the South African Poultry Association (SAPA) and confirmed through additional research (see full reference list for details). 2.2. Key statistics In this section key statistics are provided for the poultry industry as a whole and for broiler and egg production as a sub set. These statistics show insight into the performance of the industry and highlight where scope for greater participation by cooperatives may exist. 2.2.1. Industry Size The size of an industry is relevant due to a number of indicators which it presents. On the positive side, a large industry represents a high demand for a product, a lot of need for support services and industries, a large level of specialisation (which provides scope for outsourcing of functions), and a potentially large number of producers with whom small The poultry industry produces 65.5% of locally produced animal protein 7 | P a g e U r b a n - E c o n : D e v e l o p m e n t E c o n o m i s t s

2013 Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives and Collectively Owned Enterprises in the Poultry and Related Industries businesses/cooperatives may be able to do business. However, a large industry may also indicate high barriers to entry and a market dominated by large producers. The SAPA reports that the poultry industry is the largest agricultural sub-sector in South Africa accounting for 24% of all agriculture production in 2011. This figure is supported by high demand for poultry which has been seen through an increasing demand for eggs and broilers over the last 30 years. The industry provides an important source of protein with the poultry industry producing 65.5% of locally produced animal protein; poultry consumption outweighs all other animal-protein sources combined. The specific quantities produced by the egg and broiler industries are detailed below. Egg Industry 405 000 tons of eggs were consumed in 2011 o This equates to 580.2 million dozen eggs Per capita egg consumption in 2011 was 137 eggs Each year the average South African eats 137 eggs and 33.8kgs of chicken meat Broiler Industry 1 740 293 tons of boiler meat was consumed in 2011 Per capita broiler meat consumption in 2011 was 33.8kgs Implications for the Cooperatives in the Poultry Industry: The poultry industry being the largest agricultural sub-sector in South Africa shows that there is strong demand for its products. The industry produces the largest quantity of animal protein thus providing an important and cheap food source. Thus, cooperatives who successfully integrate into the industry will be producing a product which is already in demand. 2.2.2. Employment Due to the fact that unemployment is a major issue in South Africa, the number of jobs that an industry is able to create is an important statistic to consider. The poultry industry provides direct employment for over 70 000 people and indirect employment to an approximate 375 000 people. Statistics South Africa reported that a total of 431 664 people were employed full-time and 365 142 people were The poultry industry provides employment to 421 664 people: 84.3% of this is through indirect and informal employment 8 | P a g e U r b a n - E c o n : D e v e l o p m e n t E c o n o m i s t s

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