In a volatile environment, being a fully integrated producer of poultry has contributed to Astral Foods’ ongoing success, says its CEO Chris Schutte


Thirty-five million chickens is the average number of broilers that Astral Foods, the continent’s largest poultry processor, holds at any given time. ‘We need that number in order to process 5 million birds a week, in a business manned by 12 500 individuals, 24/7, all year round,’ says Astral Foods CEO Chris Schutte.

This production equates to 27% of the local market, where the formal demand for processed chicken is in excess of 27 million birds per week. With SA able to produce approximately just 19 million birds weekly, the deficit is accounted for by poultry imports. This wouldn’t necessarily be a problem, were it not for the issue of ‘dumping’, which Schutte explains is when large quantities of surplus chicken from elsewhere in the world is sold to SA at a cost well below its own market rates.

‘Although South African farmers are efficient producers of chicken, we can’t compete against dumped product. The worst effect of this is the number of local jobs that are either lost or cannot be created in the South African poultry industry,’ says Schutte. ‘We, along with organisations like FairPlay, believe that dumped poultry has a negative impact on our industry, with serious long-term consequences on both job creation and food security.

‘Over the past 10 years, we have faced many challenges, most of which can be regarded as macro-economic in nature, and in recent years we have had to face a number of issues like drought, excessive feed costs, dumping of chicken from abroad, bird flu and the collapse of municipal infrastructure.’

This, however, has not deterred Astral from its success journey, which Schutte says can also be attributed to being one of only a few SA companies that are fully integrated chicken producers. ‘In our case, this includes breeding operations, hatcheries, feed mills, broilers and poultry-processing plants, and distribution of a number of well-known brands like Festive, Goldi and County Fair and Meadow Feeds, to name a few.’

In being fully integrated, says Schutte, Astral is in a better position to optimise the poultry value chain and control costs. ‘Astral has a very simple strategy of consistent improvement to achieve its low-cost regime, and in so doing can produce a 1.8 kg broiler within 33 days at the best cost.’

Chickens at Astral are not caged, nor are they fed any growth hormones. ‘These are the type of myths that plague our industry,’ says Schutte. ‘Our chickens grow quickly because we optimise the genetic potential of the bird through nutrition and management.’

With millions invested in biosecurity measures, Astral was also able to sustain broiler production during the recent H5N8 bird flu crisis that hit the country last year. It had to cull affected flocks to prevent the spread of disease. This, however, did not prevent the company producing good results for the past financial year.

‘For the first-half of the 2017 financial year, we made R212 million; the second-half, R867 million,’ says Schutte. ‘It’s a volatile business that can be impacted by a number of macro factors such as disease, drought and the strength of the consumer. Astral is a strong generator of cash though and, through good management, is able to survive such periods of volatility.’

In January, Astral Foods achieved its highest share price – R275 – in the 16 years since it listed, making it the third-best performer on the JSE over the past year, with 120% share price growth. Schutte is in his 10th year as Astral’s CEO, having been in the poultry industry in 1983, which saw him sweeping sheds and feeding chickens on a poultry farm in the Muldersdrift area. Thirty-five years later, he remains hooked on the adrenalin of intensive poultry production.

He describes his milestone career as ‘unconventional’, and does not believe in a business school and textbook approach to business. This is the way he runs Astral Foods today. ‘You have to do extraordinary things to build experience and develop home-grown individuals.’ With this in mind, Schutte’s commitment to appointing from within has allowed the youngsters of yesteryear to develop into globally recognised executives by both the poultry and business communities.

‘We have never needed to engage a search company to acquire skills, nor are we an email company… We talk to one another,’ he says. ‘I stress transparency with all our stakeholders, be that shareholders, partners, employees, customers or communities.

‘We are also not a business focused on the opposition. Astral Foods’ success comes from being inwardly focused, by doing the right thing for the right reasons. Winners that concentrate on winning.’

By Kerry Dimmer