S.Africa: Sovereign Foods investing R60 mln

South Africa’s Sovereign Foods announces it is to commit R60 mln to capital expenditure to meet the rising demand for poultry meat as consumers diversify eating habits in response to worsening economic conditions.

South Africa’s Business Day reports that the group said the expenditure would focus on completing the upgrade of its feeding mill, expand cold storage capacity and also purchase equipment needed to satisfy customer contracts.

“This capital expenditure will be incurred in the first 6 months of the forthcoming (financial) year and will be financed predominantly from cash resources and operational cash flows,” it said.

During the financial year to February, the company spent R248 mln on capital expenditure, mostly on plant, property and equipment. This was funded by bank debt, which went up to R549 mln, up from R317 mln at the end of the past financial year.

Among projects completed were a R62 mln state-of-the-art hatchery with a weekly production rate of 900,000 birds that has the capacity to produce up to 2 mln birds per week in the long term. The group was also about to complete its feed mill upgrade with a capacity to produce up to 20,000 t of feed every month.

Source: Business Day