Old roosters hold key for new black importers
ACCESS to funding, cold storage facilities, a distribution network, customers and compliance with health regulations are some of the hurdles facing the first black importers to be awarded quotas to sell about 8 000 tons of US chicken.
First-time importer Evodia Motsepe, the chairwoman of Mega Food Supplies, said her checklist was almost complete.
Motsepe is one of eight black importers in the queue to take delivery of 1 000 tons each of imported US poultry.
Before the renewal of the African Growth and Opportunity Act agreement earlier this year, which stipulated that half of the imports of US chicken be handled by black businesses, there were none.
Under the Agoa poultry imports agreement with the US, South Africa will import about 65 000 tons of chicken a year.
The 16 500-ton quota for the first quarter was on the shelves of retailers and in the cold storage facilities of caterers on Tuesday. The second consignment of US chicken is expected in the country in mid-April and will be shared among existing importers and new black importers.
Motsepe, the only black woman importer, said she was determined to be in compliance with all the requirements for a successful import enterprise when her first quota allocation of 1 025 tons of chicken, stored in 40 containers, arrives in South Africa in mid-April.
For the next 10 years she may apply every three months for her quota to be increased or decreased.
“The sky is the limit,” she said.
After being sidelined by local producers for years, I got my break
With the help of her husband, Sol Motsepe, she has entered into a partnership with Merlog Foods.
“After being sidelined by local producers for years, I finally got my break in the poultry industry,” she said.
The partnership deal included use of cold storage and distribution facilities owned by Merlog Foods.
Georg Southey, a director at Merlog Foods, told importers at a training seminar in Pretoria this month that one container of imported quarter leg chicken cost about R510 200. A container holds about 25 tons of frozen poultry products.
The seminar was hosted by the US embassy, the Department of Trade and Industry, the Department of Agriculture, Forestry and Fisheries, and the USA Poultry and Egg Export Council.
To thrive, Southey said, new importers required a substantial cash pile, experience and a market for the imported chicken. “This is a cashhungry business. This business is very specific. You need to know who the customers are and who the suppliers are. Matching the right product at the a right price with a right customer is very important. That is something you cannot read in a textbook, you can only learn it through experience.”
That there had until now been no black importers of chicken could be attributed to a lack of exposure to that market and that it was an import business “that needs a lot of working capital for a very low return”.
“The attention might have been given to other industries which might be perceived more lucrative,” said Southey
Bomikazi Molapo, spokeswoman for the Department of Agriculture, Forestry and Fisheries, said the department had received eight applications from black importers. Successful applicants would not receive financial backing.
“The department does not get involved in funding models, only in allocating the quota,” said Molapo.
Motsepe said set-up costs were high and new entrants needed substantial support. “The best route for us is to partner with old guys in the industry.”