The Public Investment Corporation (PIC) has funded the acquisition of AFGRI Poultry and AFGRI’s Kinross Animal Feeds Mill by AFPO Consortium, a South African black economic empowerment consortium led by Matome Maponya Investments.

AFGRI Poultry has been renamed Daybreak Farms, and is now owned 54% by AFPO Consortium; 36% by the PIC on behalf of its clients, and 10% by employees and management.

Daniel Matjila, PIC CEO, said the funding was made possible with allocation from three of the PIC’s clients, the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund and the Compensation Commissioners.

“These clients have a socially responsible investment mandate, which seeks to achieve two important outcomes, namely: to generate financial returns, whilst at the same time contributing to job creation,” he said.
“This transaction is important in that it enables previously excluded groups of people to participate in the poultry industry. The planned expansion of the operations will contribute to food security with more jobs created. Above all, this transaction is in line with our clients’ mandates,” added Dr Matjila.

Daybreak Farms is a supplier of frozen chicken products to the South African market.

The company processes over a million birds per week, and the business includes the growing and processing of broilers into fresh as well as frozen whole birds, individually frozen birds and portions.

The company was acquired by AFGRI in 2006 as part of AFGRI's strategy to become a fully integrated broiler operation.

Commenting on the divestment, Chris Venter, CEO of AFGRI, said it is in line with a strategic decision to concentrate efforts on its core grain businesses and position the company for growth: “From a financial perspective the transaction enables AFGRI to reduce its gearing levels, fund priority businesses and reduce overall debt.”

The acquisition of Daybreak Farms by AFPO Consortium represents a landmark transaction for black ownership in the agriculture sector.

Agriculture is a key sector of the South African economy and constitutes a vital employment provider, especially in rural areas, as well as a sustainable source of foreign exchange and inward investment.

It is estimated that more than 40% of South Africa’s total population is dependent on this sector, both directly and indirectly.

Kholofelo Maponya, CEO of Daybreak Farms, said: “We are excited about this opportunity to participate in a critical sector such as poultry. We are, in particular, looking forward to contributing to food security here in South Africa whilst at the same time creating jobs in the communities in which we will be operating.”