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

More documents

Recommendations

Info

Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives and Collectively Owned Enterprises in the Poultry and Related Industries Based on the above responses from the retailers interviewed, it is difficult for primary cooperatives to penetrate the formal retail market. Opportunity may exit for cooperatives to form secondary or tertiary cooperatives with the purpose of grouping the assets of a number of farms and working towards packaging and labelling products. Most primary cooperatives do not have the resources to afford sufficient equipment for their farm alone. Thus, developing into an abattoir or providing value added functions may be harnessed through the formation of secondary or tertiary cooperatives. 4.2.2.4. Chicken Fast Food Chains Fast food chains appear to represent the most impenetrable market for developing broiler producers. Many abattoirs serve fast food chains as their primary clients. These chains are provided with the best broilers before the remainder are used for sale in shops. The chicken fast food chains thus demand the highest quality broilers. In addition to this, many fast food stores require a specific cut of broiler meat. This necessitates machinery which very few suppliers have. The table below illustrates the responses of three chicken fast food chains which were interviewed regarding their buying process. Table 4-12: Interactions of Chicken Fast Food Chains with Developing Farmers Business Chicken Fast Food Chain 1 Chicken Fast Food Chain 2 Chicken Fast Food Chain 3 Work with developing farmers? Reason why not Set list of suppliers who supply all franchises nationwide. Deal with abattoirs that must be able to supply 4,000-6,000 birds per day. Only use two abattoirs that are able to supply the specialised cut. Machinery is required which presents a large barrier to entry for other suppliers. Limited list of suppliers who are able to supply a large enough quantity due to the specific requirements. Small-scale producers are not able to meet the specifications. As can be seen from the above table (4-12), none of the fast food chains interviewed use small-scale producers. The first fast food chain has a centralised distribution centre. All broilers are delivered to head office and from there are shipped nationwide. None of their broiler meat is frozen and due to this, the time for delivery from abattoir to head office and from head office outwards is integral. In order to qualify as a supplying abattoir, 4,000-6,000 birds must be output per day. Bird size is also a challenge with the Fast Food Chain stating that they only accept birds within a predefined weight range, namely 1.05-1.5 kilograms. The main concerns for this chain are, therefore, the time, quality and size of birds and the time from slaughter to delivery at their head office. 75 | 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 The second fast food chain presents a larger barrier to entry for small abattoirs. This concern is also represented by at least one other chain. The type of chicken cooked and sold in their stores requires a specific cut. The chain stated that only two suppliers in South Africa have the equipment necessary to inject and cut as per their specifications. This cut was developed by another multinational producer. The chain stated that there is one additional supplier who is developing the infrastructure to produce broiler cuts to their standard. The machinery is very expensive, which is why there are so few suppliers in the country that are able to perform this function. Although it is unlikely that any developing farmers will be able to acquire this equipment, there may be scope for them to supply broilers to these abattoirs. The third fast food chain has similar concerns to the first. The contact person at this company stated that their bird production process is very technical. He stated that small-scale farmers sometimes approach them hoping to supply, but that only 20% of the birds they produce meet requirements. This results in a predicament for the farmer as they have to then find an alternative buyer for the remaining 80% of their stock. In addition to the bird size and quality requirements is a concern regarding delivery. All suppliers deliver birds to one of three depots. Reliable vehicle fleets with refrigeration is required for this. Small-scale abattoirs do not have the capacity to produce the correct quality or quantities and often do not have the necessary vehicles to deliver. Based on the interviews conducted with fast food outlets it is possible to see that very little opportunity exists for developing cooperatives to supply to these businesses. The barriers to entry in this area of the market are very high due to quality standards, quantities required and distribution. Opportunity to supply to fast food chains is only possible, therefore, if co-operatives are large and relatively successful already. 4.3. Synthesis This chapter provides an investigation into the opportunities and challenges faced by cooperatives and collectively owned enterprises in the poultry industry. The findings above are the result of research into the experiences of cooperatives, industry players at large and key producers and retailers along the value chain. Cooperatives were surveyed on a number of elements concerning their business, challenges faced and support. A number of features recurred throughout the results presented above. Many cooperatives face business constraints as a result of a lack of equipment. A factor contributing towards this is the lack of financial management and forward planning. The majority of cooperatives do not illustrate business planning and management skills. This often results in businesses operating hand to mouth with very little, if any, investment into their futures. A number of cooperatives had received support from government agencies in the past. Despite this, cooperatives stated that they require more assistance. While an inward looking analysis of cooperatives is beneficial, a better 76 | 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
Page 1 and 2:
Research Report: Addressing the Nee
Page 3 and 4:
2013 Research Report: Addressing th
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Broilers in Millions 2013 Research
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32: Research Report: Addressing the Nee
Page 81: Research Report: Addressing the Nee
show all

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

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?