Astral Foods Limited (Astral), South Africa’s leading integrated poultry producer, confirms that the company has acquired an interest of 6,42% in Quantum Foods Holdings Limited (Quantum), South Africa’s largest table egg producer with poultry breeding, broiler and animal feed operations in Southern Africa.

Following a material change in the shareholding of Quantum, Astral has been concerned that its current broiler supply agreement with the company could be jeopardised over the long-term.

The broiler supply agreement

Quantum supplies approximately 30% of the live broiler chickens Astral processes in the Western Cape, which equates to approximately 12% of the total broilers that are slaughtered by the Astral Group. If there is to be a change in control of Quantum, it could adversely affect the broiler supply agreement with them, and Astral would most probably have to consider a significant investment in broiler production capacity to ensure the continued supply of live broiler chickens to its County Fair operation in the Western Cape.

The acquisition by Silverlands II SCSp, a Luxembourg-based investment fund, of a 32% stake in Quantum announced on 10 July 2020, will also help ensure that minority interests in Quantum are protected and that the company continues to trade as an independent integrated poultry and table egg producer.

Chris Schutte, CEO of Astral, commented: “The rationale for Astral acquiring a minority stake in Quantum was to ensure that Astral’s current arms-length medium- to long-term supply agreement with them remains intact.” – Press release, Astral