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RCL Foods – proposed changes to chicken business

Shareholders are advised that RCL FOODS’ Chicken business unit has initiated steps to mitigate the crisis facing the local poultry industry. The results for the year ended 30 June 2016, published on SENS on 30 August 2016, included commentary on the significant challenges faced by our chicken business, principally as relates to commodity lines in retail competing with dumped imports. The Board and executive of RCL FOODS are evaluating the options available to the company, the immediate objective of which is to reduce the volume of commodity chicken produced.

A process of consultation with all affected employees and relevant unions has been initiated. It is RCL FOODS’ intention to engage all affected stakeholders including government, customers, suppliers and staff in the related feed and distribution operations. The imperative is to restore the profitability of our chicken business by limiting production of consequential commodity products and continuing to grow the demand-driven portfolio, largely comprising the foodservice market.

The Board of RCL FOODS is committed to managing this process responsibly, and ensuring that all stakeholders are kept informed and the most viable solution implemented.