By Nicola Mawson
South Africa’s largest chicken producer, Astral Foods, on Friday said that CEO Chris Schutte is retiring from his position in January next year when the company holds its next Annual General Meeting.
Schutte, who has been CEO since 2009 when the company was unbundled from Tiger Brands and listed separately, has seen the company go through several changes in the industry as well as tough times such as load shedding and skyrocketing maize costs.
He will consult to the company from February for a year, ensuring a smooth transition process with the incoming CEO, continue to facilitate key stakeholder engagement, and providing strategic insight to both the Astral Executive Team and the Board.
The share price closed 0.35% higher at R168.49 on Thursday.
Anthony Clark, an independent analyst at Small Talk Daily Research who has covered the poultry industry for 20 years, said Schutte leaves the company in a solid position, despite recent difficult operating conditions. “Never will you come across a more consummate professional in a food producer’s industry.”
Dr Theuns Eloff, Astral’s non-executive Chairman, said, “Chris has been a poultry man for 41 years, steadfastly serving the South African poultry industry. On behalf of the board, I would like to thank Chris for his leadership and valuable guidance during his tenure at Astral.”
In the statement, Astral said that the company was currently in a solid and healthy financial position following the worst financial period in the group's history for the year to September 2023. This, it said, was “due to the successful implementation of a focused turnaround strategy in the 2024 financial year”.
Astral said a formal replacement process has been started and it would announce details once this has been completed. Schutte said he was “confident that I am handing over to a competent team who are willing and able to take the group forward in the next phase of Astral's growth journey”.
Clark told Business Report that Schutte’s departure was not a surprise as he was close to retirement age. He indicated that COO Gary Arnold, who was appointed into that position a few years ago after Schutte had a bad motorbike accident, was the “heir apparent and probably a shoo-in”.
The poultry landscape has been through several changes since Schutte took over the helm at Astral, said Clark. He pointed to the fact that, at one stage, there was only one other producer in Rainbow Chicken, and then there were a “flurry” of more companies before a “flurry” of delistings. “The landscape in chicken has fundamentally changed,” he said.
The sector has also gone through deregulation, intensive competition in imports, skyrocketing maize prices, a serious deterioration in infrastructure such as seen in electricity, logistics, and water as well as high interest rates and inflation, said Clark.
“The chicken industry is held hostage to the consumer and the input price. Its commendable Chris has steered through all that,” he said.
A snapshot of headline earnings per share, provided by Clark, shows only two serious dips in Astral’s numbers. One each in 2012 and 2013, when maize went to R2 500 a ton from R1 000, and then last year when load shedding wracked the country.
Schutte was also honest and very outspoken, said Clark. The outgoing CEO took the government to court in 2021 over a lack of service delivery and won. Schutte has also been through some difficult times personally, such as surviving both a motorcycle accident in his Harley, and a plane crash, said Clark.
“I will be sorry to see the silver fox go. Through thick and thin, Chris has always been there, and now the silver fox is leaving the henhouse for a well-earned retirement,” said Clark.
BUSINESS REPORT