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 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.
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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