Process Management

News 250 views last update:6 Aug 2012

South African CEO confident about future

Dry and hot conditions during the critical pollination phase of the maize life cycle have led to drastic downward revisions of the crop estimate in South Africa. Nevertheless, CEO Nick Wentzel of the company Astral has confidence in the future.

The consequent sharp price increases in maize was difficult for Astral, which uses maize as raw material for its animal feed products and feeds its broilers with the product. The operating profit in the poultry division fell 5%. In the animal-feed division it raised its margin from 9.8% to 10.9%. However, the company maintained profitability, mainly by cutting costs.

Chicken demand

Wentzel is confident that consumer demand for chicken will continue and dismisses notions that other protein sources would replace poultry any time soon. "Chicken is cheap," he says.
To match a growing demand the company has two large capital projects under way. Wentzel's projections seem reasonable, but a prolonged drought, global warming, floods, or any such disaster could turn his carefully laid plans upside down, though he no longer worries about bird flu. "We're too far away from the equator," he says. "Besides, the more time passes the greater our knowledge gets and the better the chances of avoiding an outbreak."

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