Astral Foods Limited
Market Update Presentation
March 2012
Contact details
Astral Foods Limited
Chris Schutte
Chief Executive Officer
Tel :
+27 (0) 12 667 5468
Fax : +27 (0) 86 504 2002
Email: ces@astralfoods.com
Tel: +27 (0) 12 667 5468
Fax: +27 (0) 86 504 2002
Astral Foods Corporate Office
92 Koranna Avenue,
Doringkloof Centurion, 0157,
Gauteng, South Africa
Daan Ferreira
Group Financial Director
Tel : +27 (0) 12 667 5468
Fax : +27 (0) 86 504 1602
Email: daan.ferreira@astralfoods.com
Website: www.astralfoods.com
2
Market Information
3
Raw materials – Yellow Maize
Corn
acres
harvested
(mha)
Corn
yield
(bu/a)
Corn STU
ratio
CBOT
price
(c/bu)
SAFEX
YM price
(r/t)
11Aug11
12Sep11
12Oct11
09Nov11
09Dec11
12Jan12
09Feb12
09Mar12
84.4
84.4
83.9
83.9
83.9
84.0
84.0
84.0
153.0
5.4%
678
2010
148.1
5.3%
726
2198
148.1
6.8%
645
2094
146.7
6.7%
661
2375
146.7
6.7%
600
2461
147.1
6.7%
652
2735
147.1
6.3%
643
2510
Comments
147.1
Yield drop from
158.7 in Jul11 to
147.1 in Jan12
due to adverse
weather and
below average
crop conditions
6.3%
Impact of lower
production results
in the lowest STU
ratio since 1995/6
636
The actual Corn
price on CBOT is
currently 636c,
down from 786c in
Jun11, a drop of
19%
2485
SAFEX YM price
rose from R1730
in Jul11 to R2735
in Jan12, a rise of
58%
4
Raw materials – Soybeans
Soybean
acres
(mha)
Soybean
yield
(bu/a)
Soybean
STU ratio
CBOT
price
(c/bu)
SAFEX
price (r/t)
11Aug11
12Sep11
12Oct11
09Nov11
09Dec11
12Jan12
09Feb12
73.8
73.8
73.7
73.7
73.7
73.6
73.6
41.4
4.9%
1301
3315
41.8
5.2%
1417
3615
41.5
5.1%
1236
3240
41.3
6.3%
1195
3375
41.3
7.6%
1133
3220
41.5
9.1%
1198
3445
41.5
9.1%
1232
3270
09Mar12
Comments
73.6
41.5
9.1%
1333
3505
Yield drop from
43.4 in Jul11 to
41.5 in Jan12 due
to adverse
weather resulting
in below average
crop conditions
The estimated
STU for the
current season is
9.1%
The actual
Soybean price on
CBOT declined
from 1417c in
Sep11 to 1133c in
Dec11, a fall of
20%. Since then it
rose 18% to 1333c
SAFEX Soya price
dropped from
3615 in Sep11 to
3220 in Dec11, a
drop of 11%.
Since then it rose
9% to 3505
5
Safex Yellow Maize price from October 2004
Source: CJA Strategic Risk Brokers
6
Safex Yellow Maize vs CBOT Corn in Rand terms
Source: CJA Strategic Risk Brokers
7
Poultry imports
February
2012 (tons)
2011 (tons)
Var (tons)
Var (%)
Chicken
22 099
15 899
6 200
39.0
+ 29%
MDM/Turkey
14 211
8 057
6 154
76.4
Total
36 310
23 956
12 354
51.6
YTD
F2012 (tons)
F2011 (tons)
Var (tons)
Var (%)
Chicken
104 342
73 703
30 639
41.6
MDM/Turkey
68 905
53 726
15 179
28.3
Total
173 247
127 429
45 818
36.0
8
Total poultry imports - chicken, turkey and MDM
Tons
350,000
300,000
+36%
y on y
250,000
200,000
150,000
100,000
50,000
F2009
0
F2010
F2011
F2012
Oct
18,762
20,093
24,684
33,348
Nov
36,916
40,735
48,108
67,819
Monthly
(tons)
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
F2011
24 684
23 424
28 403
26 963
23 955
29 366
26 076
32 813
34 397
35 970
34 270
29 043
F2012
33 348
34 471
32 721
36 388
36 319
Var (%)
35.1%
47.2%
15.2%
35.0%
51.6%
F2009
F2010
F2011
F2012
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
60,196 71,103 79,764 105,500 132,225 155,103 177,313 193,784 211,396 232,293
60,774 77,813 97,763 124,813 142,226 160,940 185,290 209,164 229,951 252,485
76,511 103,474 127,429 156,795 182,871 215,684 250,081 286,051 320,321 349,364
100,540 136,928 173,247
Industry trends and statistics |
9
Poultry imports per month
Tons
40,000
+ 29%
35,000
30,000
25,000
20,000
15,000
10,000
5,000
O N DJ06F MAM J J A S O N DJ07F MAM J J A S O N DJ08F MAM J J A S O N DJ09F MAM J J A S O N DJ10F MAM J J A S O N DJ11F MAM J J A S O N DJ12F
2006
2007
2008
2009
2010
2011
10
Per capita consumption: South Africa
Kg
40.0
36.1
35.0
31.0
30.7
30.0
33.0
31.8
31.5
27.9
25.0
21.7
20.0
15.0
10.0
5.0
13.8
7.2
3.9
2.8
15.9
7.8
4.0
3.2
17.4
8.3
17.6
16.4
9.4
8.9
8.3
4.2
3.7
4.2
3.4
17.7
15.8
4.1
3.5
4.2
3.2
8.5
4.6
3.2
16.6
8.2
4.6
2.7
2000
Chicken
2005
Beef
Industry trends and statistics |
2006
Eggs
2007
Pork
2008
2009
2010
2011
Mutton/Goat
11
Apr-06
Jun-06
Aug-06
Oct-06
Dec-06
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Feb-12
13.00
12.00
11.00
Broiler sales
Source:
SAPA trends and statistics |
Industry
36 month average
13.50
13.50
13.51
13.34
13.42
13.20
13.38
13.46
13.18
12.79
12.86
13.56
13.91
11.96
11.95
11.75
12.22
11.75
11.76
12.29
11.83
12.33
12.83
16.00
14.90
15.40
14.60
13.95
13.78
14.06
14.60
14.04
13.41
13.81
13.09
13.12
13.22
13.47
13.41
12.70
17.00
15.44
15.81
16.28
14.82
11.45
11.88
12.38
12.57
12.84
13.46
13.92
14.32
13.80
15.00
12.29
12.05
12.45
11.75
11.24
11.88
12.20
12.42
12.29
12.35
12.70
12.39
13.10
14.00
10.38
10.59
10.56
10.42
11.12
10.79
11.36
Industry broiler selling prices
Rand per kg
36 month average
= R13.17
10.00
9.00
Six month average
12
Broiler price vs maize price vs feed price vs imports
Rand per kg
Rand & tons
17.00
4500
16.50
4000
16.00
3500
15.50
15.00
3000
14.50
2500
14.00
2000
13.50
13.00
1500
12.50
1000
12.00
500
11.50
0
Oct-06
Dec-06
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Feb-12
11.00
Broiler selling price
Yellow maize price
Broiler feed price
Imports (tons/10)
13
Broiler price vs food price inflation
Rand per kg
17.00
130
16.50
125
16.00
120
15.50
115
15.00
14.50
110
14.00
105
13.50
100
13.00
95
12.50
90
12.00
Broiler selling price
Source: CJA Strategic Risk Brokers
Feb-12
Dec-11
Oct-11
Aug-11
Jun-11
Apr-11
Feb-11
Dec-10
Oct-10
Aug-10
Jun-10
Apr-10
Feb-10
Dec-09
Oct-09
Aug-09
Jun-09
Apr-09
Feb-09
Dec-08
Oct-08
Aug-08
Jun-08
Apr-08
Feb-08
Dec-07
Oct-07
Aug-07
Jun-07
Apr-07
80
Feb-07
11.00
Dec-06
85
Oct-06
11.50
SA Food price index
14
Anti-dumping tariffs
USA
Bone-in portions / leg quarters
• General tariff and rate of duty on bone-in portions: 220 c/kg
• In addition, an anti-dumping duty on US producers: Tyson 224 c/kg, Gold
Kist 245 c/kg & others 696 c/kg
Brazil
Boneless cuts
• General tariff and rate of duty on boneless cuts: 5%
• In addition provisional anti-dumping duty of 6.26% ad valorum on boneless
cuts produced by Aurora Alimentos, and
• 46.59% ad valorum on boneless cuts produced by all other producers in
Brazil
Frozen whole chicken
• General tariff and rate of duty on frozen whole chickens / hens: 27%
• In addition provisional anti-dumping duty of 62.93% ad valorum on whole
frozen chicken from Brazil
15
Brazil provisional anti-dumping duty
% of Brazil imports affected - 5 months ending February (F2012)
• % boneless cuts
• % frozen whole
• % of Brazil
6.1 %
10.4 %
16.6 %
[≈ 8.8% of Total imports]
% imports by country - 2011
16
Brazil provisional anti-dumping duty
Influence on local importers?
• Minimal impact expected on local importers through the imposition of the
Brazilian provisional anti-dumping duty
• The two categories on which the additional duty is applied are small
• Importers will likely source these products elsewhere
• The duty on the boneless cuts will impact mainly on the catering sector
Leg quarters?
• South African Poultry Association investigations on-going
• There has been insufficient evidence to prove beyond doubt dumping of
Brazilian leg quarters
Next steps?
• Incumbent on industry to prove dumping and negative impact on local market
• Industry has to co-operate and work collectively (Competition Commission?)
17
Brazil benchmark – broiler efficiencies (2011)
Age
BRAZIL
USA
ASTRAL
35
35
35
kg
1 883
1 805
1 840
g/day
53.81
51.59
52.56
%
3.14
2.37
4.52
ratio
1.658
1.802
1.671
factor
314
280
301
days
+ 29%
Live weight
Average daily gain
Mortality
Feed conversion
PEF
Source:
Astral, trends
USDA and
& Nutron
Brazil|
Industry
statistics
18
Astral broiler production performance
106%
104%
102%
100%
(37.8 days)
98%
96%
94%
(34.7 days)
92%
Key indicators baselined to 100% in 2007
90%
F2007
Slaughter age
F2008
Live weight
F2009
F2010
F2011
YTDF2012
Processing yield
19
Competition commission matters
Specific allegations – Astral Foods
Astral currently negotiating one settlement to close all open matters
Poultry industry investigation - 2009
The industry wide investigation into the animal feed and poultry industry initiated
in 2009 is on-going
20
Outlook – short term
Negative

High industry chicken stock levels

High imports (Brazilian leg quarters)

Maize price gap closing – old vs new season

Maize exports to Mexico to continue
[vessels for Mexico exports booked to
September 2012 / SA total exports of maize
forecast at 2.5 million tons for marketing year)

Lower maize yields expected for new crop
due to adverse weather (< 11 million tons)
Positive

Anti-dumping tariff application and provisional
anti-dumping duties on Brazil

Upward price potential and long term upward
trend in chicken consumption

Return of good production efficiencies
following industry wide challenges

Increasing local soya bean and meal
production

Maize import opportunities from Zambia
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Q&A
DISCLAIMER
The information and opinions contained in this document have been compiled or arrived
at by Astral Foods from sources believed to be reliable and in good faith, but no
representation or warranty, express or implied, is made to their accuracy, completeness
or appropriateness. All opinions and estimates contained in this document are subject to
change without notice. Astral Foods undertakes no obligation to update, or to correct any
inaccuracies which may become apparent in this document. Astral Foods does not
accept any liability whatsoever for any direct, punitive or consequential loss arising from
any use of this document or its contents. This document is incomplete without reference
to, and should be viewed solely in conjunction with the oral briefing provided by Astral
Foods.
The document contains forward-looking statements about the company’s operations and
financial conditions. They are based on Astral Foods best estimates and information at
the time of writing. They are nonetheless subject to significant uncertainties and
contingencies many of which are beyond the control of the company. Unanticipated
events will occur and actual future events may differ materially from current expectations
due to new business opportunities, changes in priorities by the company as well as other
factors. Any of these factors may materially affect the company’s future business
activities and its ongoing financial results.
23