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

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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

Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives and Collectively Owned Enterprises in the Poultry and Related Industries Figure 2-6: Total Birds by Province WESTERN CAPE & NORTHERN CAPE 20% EASTERN CAPE 6% FREESTATE 8% GAUTENG 10% NORTH WEST 21% KWAZULU-NATAL 15% MPUMALANGA 17% LIMPOPO 3% Source: South African Poultry Association, 2011 The bar chart below illustrates the differential between layer and broiler numbers by province. It shows that the areas which produce large quantities of broiler meat are not necessarily the areas which produce a large number of eggs. The smallest difference between the two exists in Gauteng where a total of 6 961 969 broiler birds and a total of 6 004 853 layer birds were found. The spread of layer birds for the production of eggs is more consistent across the provinces. Broiler producers however show a greater concentration in specific areas with the North-West dominating production. Figure 2-7: Bird Numbers by Province 30000000 25000000 20000000 15000000 10000000 5000000 0 TOTAL BROILER BIRDS TOTAL LAYER BIRDS 18 | 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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