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
Figure 4-17: Forms of Support Cooperatives Would Like to Receive
Financial assistance
27%
Training
22%
Equipment
19%
Marketing & advertising
10%
Access to premises
7%
Other
13%
0% 5% 10% 15% 20% 25% 30%
Source: Urban-Econ Survey, 2013
The analysis that follows examines more closely the current challenges faced by cooperatives. It
identifies, per category, where cooperatives identified their main challenges to be and what factors
they view as contributing towards the deficiencies they see within their businesses.
Figure 4-18 below shows the responses of cooperatives when asked about their current challenges.
The main challenges highlighted by cooperatives are a lack of finances and a lack of equipment. This
reinforces the information gathered in the background section (refer to Section 4.1.2.1).
Cooperatives were very responsive regarding their challenges with most cooperatives stating that
they do not have sufficient equipment to properly run their business. Due to the high cost of
equipment, this is not a surprising challenge. Many poultry producers indicated above that they are
not able to reinvest funds into the business. Without any savings it is unlikely that cooperatives are
able to save enough money to invest in their businesses. Additionally, equipment is a highly
constraining factor on business (and hence profit) growth. This is especially true in the case of broiler
production, which constitutes the majority of cooperatives interviewed.
With one broiler house a specific number of birds can
be grown at a time. While cooperatives can work
towards decreasing mortality rates and thereby
marginally increasing profits, without additional chicken
houses there is a ceiling on the numbers that can be
produced. According to a DPFO representative
interviewed, a fully equipped and well-designed chicken
coop can cost around R3.8 million. With many
cooperatives barely able to pay their own salaries, this
is an unattainable piece of equipment.
The main present
day challenges
highlighted by
cooperatives were
a lack of finances
and a lack of
equipment
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