Latest news with #DaybreakFoods
Daily Maverick
29-06-2025
- Business
- Daily Maverick
Plucked — Trouble at Daybreak Foods as Altron halts services
Poultry producer Daybreak Foods, which has been in the news for all the wrong reasons, has been left without IT services after failing to honour its payment agreements with Altron Digital Business. The suspension is having a troubling operational impact and complicates the business rescue process. Altron Digital Business has suspended IT services at Daybreak Foods, further disrupting critical operations at the poultry producer and complicating its business rescue efforts. 'The temporary shutdown of the IT services by Altron Digital Business has negatively affected the business rescue proceedings in respect of the due diligence process,' said Tebogo Maoto, Daybreak's senior business rescue practitioner. Key functions including employee communication, payroll processing, payment to essential suppliers and email services have all been affected, hampering efforts to stabilise Daybreak Foods. Despite a payment of R1.4-million made on 31 May to restore services, Altron has refused to lift the suspension, citing unresolved historic debt, which is now part of the business rescue legal process. Altron confirmed that although payments have been received, they did not satisfy the terms of a settlement agreement reached earlier this year to address Daybreak's long-standing debt. 'The issue of non-payment has been a persistent challenge for over 12 months,' Altron said. It added that it continued providing services and seeking solutions, but was forced to suspend IT operations because of Daybreak's failure to comply with the agreement. Talks with the business rescue practitioner were continuing in the hope of securing a grace period to resume essential services, and the matter was now with the lawyers 'to find a settlement'. The IT shutdown compounds an already dire financial and operational crisis. Daybreak held two consecutive online Q&A sessions for creditors and employees – the first on Monday, 23 June, and a follow-up the next day – that laid bare the company's deepening financial woes and the impact on workers. During the Monday session, company representatives revealed that Daybreak was 'not able to pay creditors' and was 'in financial distress'. This stark admission set the tone for a Tuesday session centred on workers' salary payments, due on 25 June, and the increasingly desperate situation they face. During the session, workers were told that some company functions had been disrupted and that it had 'limited funds in the bank' and 'insufficient funds at this stage to make payments of the salaries'. Faced with unpaid wages and no clear resolution, one employee voiced the harsh reality confronting many: 'Daybreak needs to retrench employees.' This reflects the desperation among staff, who see retrenchment as the only way to access UIF benefits and survive financially. Daybreak, however, said it was actively working to provide relief to employees. It said the process for UIF claims had been expedited and it was hopeful of securing funding to help workers during this crisis. Animal welfare crisis The roots of Daybreak's collapse run deep. Earlier this year, investigations exposed systemic animal welfare failures at the company's broiler operations. More than 1 million chickens died or suffered prolonged distress. The National Council of SPCAs (NSPCA) called it 'a grave and morally reprehensible failure' and images of emaciated birds packed into overcrowded sheds and cannibalising one another shocked South Africans. The Johannesburg High Court intervened on 23 May, ordering Daybreak to stop inhumane culling, provide adequate nutrition, halt new chick placements and grant full access for inspections. The court criticised the company's leadership for 'financial mismanagement of the available funds', which directly contributed to the animal welfare crisis. In response to mounting pressure, Daybreak entered voluntary business rescue proceedings – a move that raised questions about transparency and accountability. Board chairperson Bojane Segooa resigned amid public outrage over a R625,000 payout to her, and Daybreak's majority shareholder, the Public Investment Corporation (PIC), faced scrutiny for oversight failures. Workers and contractors remain unpaid, and the NSPCA continues to pursue criminal charges. Now, with Altron's suspension of IT services, the business rescue process faces a critical hurdle. The practitioner's ability to access historic data and communicate effectively is severely compromised, threatening efforts to stabilise Daybreak and protect the interests of creditors, employees and animals alike. Maoto said he was confident that an amicable solution with Altron would be found in due course, but the path forward remains uncertain. For a company still reeling from one of South Africa's most shocking corporate and animal welfare disasters, the IT shutdown is a stark reminder that the crisis is far from over. A history of failure Founded in 2001 as a small-scale poultry operation, Daybreak Foods grew to become a notable supplier of fresh and frozen poultry products in South Africa. In 2005, it was acquired by Afgri, a large agricultural services group historically owned and managed by white South African interests, for R110-million, as Afgri re-entered the broiler market. Under Afgri's management, Daybreak operated within an integrated agricultural conglomerate that included feed mills and abattoirs. Despite this, the company faced sector-wide challenges such as volatile feed costs and competition from cheaper imports. In 2015, Afgri sold its poultry operations to a black economic empowerment (BEE) consortium led by Matome Maponya Investments, with financial backing from the PIC. This transfer was part of a broader government initiative to increase black ownership in agriculture. The company was rebranded as Daybreak Farms and later Daybreak Foods. The PIC held a significant share alongside the consortium and employees. Since the BEE acquisition, Daybreak's difficulties have only escalated. Years of financial strain, governance lapses and operational mismanagement culminated in a liquidity crisis. Despite the PIC's full control and a R74-million capital injection, unpaid debts surpassed R140-million, and a request for a R250-million bailout was declined earlier this year. Leadership instability included four CEOs resigning in four years, leaving workers unpaid and operations stalled. Political pressure intensified as the Democratic Alliance (DA) called for parliamentary hearings and an investigation by the Financial Sector Conduct Authority into the PIC's oversight failures. The DA condemned labour abuses, animal cruelty and mismanagement, highlighting unpaid workers and the mass euthanisation of more than 350,000 chickens under dire conditions. The party also filed a Public Access to Information Act request demanding that the National Treasury disclose the steps it had taken after the Mpati Commission of Inquiry made recommendations to rectify issues related to PIC governance. With public funds exceeding R1.4-billion at stake, the DA has demanded transparency and accountability. The continuing IT shutdown and stalled business rescue efforts deepen uncertainty, leaving thousands of workers and hundreds of thousands of chickens caught in the fallout. DM
TimesLIVE
10-06-2025
- Business
- TimesLIVE
Mandate, not mismanagement: PIC clarifies position on unlisted investments and Daybreak
There are ongoing allegations that the Public Investment Corporation (PIC) has 'squandered R33bn' of pensioners' money on politically motivated investments. The PIC strongly denies these claims, arguing they misrepresent and oversimplify a complex investment process aimed at identifying opportunities in a broad market, where outcomes cannot be guaranteed. While acknowledging the inherent risks associated with these investments, the PIC asserts that it remains committed to seeking opportunities with the highest likelihood of positive results. This issue has come to public attention recently due to the challenges faced by Daybreak Foods, which the PIC acquired in 2015 for R1.2bn. This investment was intended to achieve long-term sustainable returns while contributing to food security in the country and supporting economic transformation. The PIC emphasises that the claims against it oversimplify the complexities of long-term developmental investing and the inherent risks that come with it. The PIC manages more than R3-trillion in assets, with about R2.5-trillion allocated for public servants through the Government Employees Pension Fund (GEPF). The remainder of the assets represents clients whose beneficiaries are contributing workers across the country. The PIC acknowledges the seriousness of its responsibilities and operates under a clear mandate that goes beyond simply maximising financial returns. This mandate includes making investments that foster economic development, industrialisation, job creation and broader transformation in South Africa. Unlisted investments, such as Daybreak Foods, play a crucial role in our developmental mandate. Though there are operational and governance challenges at Daybreak Foods — currently undergoing business rescue — the PIC believes the criticism it has received presents an incomplete and misleading view of the situation. The PIC asserts that the ongoing business rescue process should not be seen as a sign of impending liquidation or a total loss. Rather, they view it as a strategic and legally sound method to stabilise the company, preserve more than 3,000 jobs and ultimately recover value for its clients, primarily government pensioners. Daybreak Foods supplies 7% of South Africa's poultry, making its ongoing operations essential for national food security.
TimesLIVE
10-06-2025
- Business
- TimesLIVE
Mandate, not mismanagement: PIC clarifies position on unlisted investments and Daybreak Foods
There are ongoing allegations that the Public Investment Corporation (PIC) has 'squandered R33bn' of pensioners' money on politically motivated investments. The PIC strongly denies these claims, arguing they misrepresent and oversimplify a complex investment process aimed at identifying opportunities in a broad market, where outcomes cannot be guaranteed. While acknowledging the inherent risks associated with these investments, the PIC asserts that it remains committed to seeking opportunities with the highest likelihood of positive results. This issue has come to public attention recently due to the challenges faced by Daybreak Foods, which the PIC acquired in 2015 for R1.2bn. This investment was intended to achieve long-term sustainable returns while contributing to food security in the country and supporting economic transformation. The PIC emphasises that the claims against it oversimplify the complexities of long-term developmental investing and the inherent risks that come with it. The PIC manages more than R3-trillion in assets, with about R2.5-trillion allocated for public servants through the Government Employees Pension Fund (GEPF). The remainder of the assets represents clients whose beneficiaries are contributing workers across the country. The PIC acknowledges the seriousness of its responsibilities and operates under a clear mandate that goes beyond simply maximising financial returns. This mandate includes making investments that foster economic development, industrialisation, job creation and broader transformation in South Africa. Unlisted investments, such as Daybreak Foods, play a crucial role in our developmental mandate. Though there are operational and governance challenges at Daybreak Foods — currently undergoing business rescue — the PIC believes the criticism it has received presents an incomplete and misleading view of the situation. The PIC asserts that the ongoing business rescue process should not be seen as a sign of impending liquidation or a total loss. Rather, they view it as a strategic and legally sound method to stabilise the company, preserve more than 3,000 jobs and ultimately recover value for its clients, primarily government pensioners. Daybreak Foods supplies 7% of South Africa's poultry, making its ongoing operations essential for national food security.
The Citizen
06-06-2025
- Business
- The Citizen
Industry warns of meat price spike and hunger as SA faces supply crisis
South Africa's meat supply is under pressure from a 'triple whammy' of crises: bird flu in Brazil, a poultry producer's collapse, and a foot-and-mouth disease outbreak. A combination of a perfect storm of factors has led to a meat supply crisis which could see the price of meat spike over the winter, as well as increasing hunger and malnutrition, according to major players in the food industry. The 'triple whammy' which has hit the local market over the past few weeks is the ban on the imports of chicken from Brazil, some regions of that country having been hit by avian flu; a crisis at Daybreak Foods, one of South Africa's largest integrated poultry producers, which has entered business rescue after being forced to cull 350 000 starving chicks and, finally, this week, the diagnosis of foot-and-mouth disease in animals on feedlots of Karan Beef. A perfect storm Eskort CEO Arnold Prinsloo said the three developments represented a perfect storm for food security. He said that mechanically deboned meat from Brazilian chickens was used in affordable products such as polony and Viennas, adding that some smaller producers have already run out of raw material since the Brazilian import ban was imposed on 15 May. 'If the quarantine is prolonged or the disease spreads, it is possible that beef supply will contract and prices will rise, just as the supply of chickens from Daybreak comes under pressure from the company's bankruptcy and polony vanishes from supermarket shelves,' he said. 'We have calculated that 400 million low-cost meals per month will be affected by the import crisis alone, so this triple whammy to food security requires urgent action from the department of agriculture, starting with a decision to narrow the Brazilian ban to Rio Grande do Sul, the only state affected by avian flu,' he added. ALSO READ: Bird flu ban: Brazil suspension takes chicken and polony off South African tables — prices set to rise Poultry industry 'disingenuous' Prinsloo said he was disappointed by the poultry industry's insistence that the import ban does not pose a food security risk. 'South Africa imports 19 000 tons of mechanically deboned meat every month from Brazil because domestic producers only have the capacity to supply 100 tons.' He said it was disingenuous of the poultry industry to dismiss the looming shortage, particularly when the people who will suffer most are the ones with the fewest affordable choices. Eskort has joined industry bodies including the Association of Meat Importers and Exporters and the South African Meat Processors Association in calling on Minister of Agriculture John Steenhuisen to instruct officials to expedite Brazil's application for an agreement allowing it to apply for recognition of disease-free geographical zones. Chicken supply cut Another big bite out of the meat market supply was the cut of almost 12 million chickens a month following the National Council of SPCAs (NSPCA) suspension of Daybreak's operations. Last month, the NSPCA obtained an urgent interim court order from the High Court in Johannesburg compelling Daybreak Foods to immediately cease all inhumane culling practices and to provide adequate, appropriate feed to hundreds of thousands of breeder birds at its facilities. ALSO READ: Will SA run out of beef and chicken? Animal disease hits SA's top producer — what it means for consumers The interim order was made final by the high court on 23 May. Farmers have called on the government to act to contain foot-and-mouth disease (FMD) before it is too late. FMD spread in SA Southern African Agri Initiative (SAAI) president Dr Theo de Jager said the outbreak of FMD in KwaZulu-Natal and its subsequent spread to some of the largest feedlots in South Africa, was a disaster of immeasurable scale for cattle farmers. 'SAAI has been engaging with the department of agriculture since December 2024, when the first rumours of FMD began circulating,' he said. 'It took months before the outbreak was officially declared and resources were mobilised to combat it.' Karen Beef suspends exports Meanwhile, Karan Beef spokesperson senior feedlot veterinarian Dr Dirk Verwoerd said a case of FMD had been confirmed at its feedlot facility in Heidelberg on Monday. 'The outbreak occurs during peak weaning season and will significantly disrupt the national supply chain. Farmers may be forced to hold calves longer than usual due to limited feedlot capacity. Karan Beef has suspended all exports,' he said. Verwoerd said consumers should know there is no risk to human health and that local beef supply may be affected in the short term. Business rescue for stricken chicken producer Daybreak Foods
The Citizen
06-06-2025
- Business
- The Citizen
Rising meat costs will punish the poor
With imports halted and diseases spreading, meat prices are set to rise, putting added strain on households already battling food insecurity. How is it that the head of a company specialising in pork products should go into bat on behalf of the poultry sector as a meat supply crisis engulfs our country? It sounds odd, but as Eskort CEO Arnold Prinsloo explains it, you can see the logic. The government has banned the importation of chickens from Brazil, because of the outbreak of avian flu in certain parts of that country. What that means is that we are no longer importing the estimated 19 000 tons of mechanically deboned meat (MDM), which is a vital component of processed meats such as polony, of which Eskort is one of a number of suppliers. The ban on imports comes as two other blows have hit meat supplies. First, there was a crisis at Daybreak Foods, one of South Africa's largest integrated poultry producers, which has entered business rescue after being forced to cull 350 000 starving chicks. ALSO READ: Tiger Brands to make interim advance payments to listeriosis victims as class action continues Then came the news this week that foot-and-mouth disease had been detected at a Gauteng feedlot owned by Karan Beef. Prinsloo reckons all of this combined can lead to hikes in the price of meat across all categories and, because the cheaper processed meats rely on MDM, it could be the poor who are hardest hit. The meat industry, along with farmers' groups, are upset at the government, specifically for its inaction. The concern among farmer's organisations is that the authorities did not act quickly enough to contain the foot-and-mouth outbreak, with the result that many cattle farmers could face financial ruin as they will be banned from moving or selling their stock. The meat industry wants the government to immediately amend the Brazilian import ban so that it applies to only those areas in that country actually affected by bird flu. Unless urgent action is taken, we face a cold, hungry winter. NOW READ: Soweto's smoked meat master makes waves
