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

Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives
and Collectively Owned Enterprises in the Poultry and Related Industries
2.5. Industry Ownership
The distribution of the industry between commercial production and SMME’s provides an indication
of whether small businesses are able to break into the market. A higher percentage ownership by
SMME’s indicates a potentially easier market for penetration by cooperatives.
Egg production:
Within the egg production process, 49% of domestic
production is accounted for by SMME’s
51% commercial production is dominated by only three
large producers: Eggbert (7%), Nulaid (32%) and Highveld
(12%)
SMME’s account
for 49% of egg
production and
27% of broiler
production
Broiler production:
Large producers still dominate the broiler market, contributing to 72% of production
according to the 2011 Department of Agriculture, Forestry & Fisheries (DAFF) Broiler Profile
72% is produced by only eight large producers
The value chain above provides more insight into these statistics. Although the broiler market is
dominated by large producers there may be scope for cooperatives to participate through support
functions, secondary industry and consumption of outputs. For example, as can be seen in the valuechain
above, spent hens may be given to informal traders who then sell directly to consumers on a
small-scale.
Implications for the Cooperatives in the Poultry Industry:
Large number of existing producers; may indicate high barriers to entry but also indicates that there are
many potential producers with whom co-ops can do business
2.6. Distribution
The spread of the poultry industry over the various provinces as well as the concentration of
production in each province creates a picture of where the industry is the most prominent. As can
be seen in the pie chart below, the North-West and Western Cape & Northern Cape dominate the
industry with 21% and 20% share of total broilers and layers respectively.
17 | 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