Posted: January 16, 2023
The support that government provides to black-owned companies operating in the poultry industry will contribute significantly in transforming the industry and ensuring that there is food security in the country. However, it is imperative for government to realise that the sustainability of these businesses depends on black companies occupying the entire value chain of the industry. This is the view of the 37-year-old North West industrialist, Mr Ofentse Moloko.
Moloko is the Chief Executive Officer and Managing Director of Baramakama Poultry, a family owned egg-laying chickens company situated in Molote City, North West.
Baramakama received support to the tune of R50 million from the Department of Trade, Industry and Competition (the dtic) and its development finance institution, the Industrial Development Corporation (IDC), as part of the Black Industrialists Programme. The programme is part of government’s efforts to accelerate the quantitative and qualitative increase and participation of Black Industrialists in the South African economy, selected industrial sectors and value chains.
“We are a perfect example of the success that black-owned companies can achieve with the support of government in the poultry industry. We started from nowhere in 2016 when my father decided to use his savings to invest back into the community of Molote City. We decided to establish a poultry business, specifically in the layers as they showed the greatest opportunity for employment creation as well as massive room for economical and ownership transformation. For almost three years we persistently and continuously knocked on the doors of all the private banks in this country, but the doors were all slammed on us after months of completing their processes, mainly due to the land belonging to the community. When the dtic and IDC decided to fund our business after a thorough due diligence process, it was like music to our ears,” says Moloko.
The financial support from the dtic and IDC enabled Baramakama to expand its operations by adding five new automated chicken houses and a modern, state-of-the-art pack station. The support was noticeably impactful as the company managed to increase the premises’ carrying capacity from 100 000 hens before the support to 280 000 after the infrastructural expansion. In addition, forty new jobs were created as the number of permanent employees increased from 80 to 112 as all aspects of the business expanded. Almost 80% of the employees are young people, while 44% are women.
“Today our operation runs 24 hours per day and on average we produce 225 000 eggs per day at full capacity. The support we received from government has made us a recognisable and important player in the industry,” says Moloko.
Although he appreciates the importance and recognises the value of the support that the government provides to the Black Industrialists, Moloko strongly believes that government should consider extending its support across the value chain of the poultry industry to achieve sustainability and ensure success.
“The government support needs to cut across the value chain if we want meaningful transformation of the industry, and if we want the Black Industrialists to play an important and discernible role in food security in the country. This includes feed production, hatcheries, abattoirs, chick rearing, processing, as well as market access. Although we regard ourselves as a success after obtaining the support, we are left at the mercy of our key competitors from whom we source feed and hens. That makes us vulnerable as the supply tabs can and are regularly switched on and off depending on how they want to control and benefit from the market conditions,” adds Moloko.
Moloko does not pin all his hopes on the Poultry Sector Master Plan, which was developed in close partnership between government and several stakeholders in the industry, including poultry producers, processors, exporters, importers and organised labour. One of the objectives of the plan is to increase the level of black participation and particularly ownership across the value chain and increase employment and worker share-ownership in the sector.
Moloko believes that most strategic decisions taken within the Poultry Master Plan depend much on the existing large players in the industry, who through their actions do not easily allow black players into the more profitable value chain channels. But he remains resolute and hopeful that with more black players in the value chain, the industry will not only transform, but allow healthy competition to the benefit of all participants.
Caption: The Chief Executive Officer and Managing Director of Baramakama Poultry, Mr Ofentse Moloko.
Bongani Lukhele – Director: Media Relations
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Issued by: The Department of Trade, Industry and Competition (the dtic)
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