Historic, Integrated Poultry Operation Expanding Across SA
PRODUCTION: Harry Webster
Fresh South African chicken provides cost-effective protein for consumers and growing integrated business, Sangiro, is keen to service increasing local market demand with high quality supply. Operations Director Legh Wilkinson tells Enterprise Africa more about this growing family business as it aims for increased market share.
SANGIRO
INDUSTRY FOCUS: AGRICULTURE
//‘Know Your Farmer, Know Your Food’ is the tagline for South Africa’s Sangiro, a leading poultry business based in Broederstroom, North West. The integrated farming, abattoir, and distribution business connects consumers with the very best fresh chicken available in South Africa.
Operations Director Legh Wilkinson says that South African’s love for a braai or shisa nyama and ever-changing attitudes around quality are driving insatiable demand for high quality chicken products as the cheapest and most widely available protein source in the country.
She knows the farmer and knows the food; a biochemistry PhD holder, working in the industry for six years, and learning the family business from father Andrew Wilkinson. Andrew, a
poultry farmer, restarted the Sangiro abattoir in 2012 with his own supply of chickens from a number of familyowned farms, and over the years has recruited contract growers to increase the supply of live birds to the abattoir. With a little assistance from an increase an import tariffs and the restriction of brine injection as well as hands-on management, intensely optimising the abattoir processes and effectively marketing products, the business grew fast.
Today, Sangiro can guarantee personalised customer service, high quality fresh chicken, a tightly monitored cold chain, and no injection of salt brine.
“Due to an increasing demand for fresh un-injected chicken, we cannot keep up with supply,” says Legh Wilkinson.
She tells Enterprise Africa that the company is ambitious and looking forward with a healthy appetite as it prepares to open two new abattoirs as well as associated operations. Alongside more quality food for local markets, these investments will result in thousands of new jobs, a desperate need in a country like South Africa where unemployment is rife.
THREE BIRDS PER SECOND
“Our current abattoir processes one million birds each week – that’s three per second. We have achieved immense growth over the last 10 years and we now employ just over 1000 people across operations. We would never be able to achieve what we have without the commitment and dedication from our incredible workforce, managers and general workers alike.
“We have recently acquired abattoir in the Western Cape and that should take around 12 to 18 months to become fully functional. Currently, we are sending whole birds from Johannesburg to Cape Town and portioning them before going into retail. We are busy sorting out the flooring, re-doing all of the infrastructure, and kitting it out to be a really high-quality fresh facility. We want to replicate what we do in Johannesburg in the Western Cape. When complete, it should put another 500,000 birds into the market each week with the potential to employ another 450-500 people at that site.”
At the same time, Sangiro is busy planning a R350 million investment into a new facility in Gauteng. Around 10 km from its existing site, the idea is to build a greenfield project that will create another 1500 jobs. Sangiro will
build everything, including assisting with the energy infrastructure, and the management team will imbue skills to a new generation of poultry industry professionals.
“We hope to increase our volume to close on two million birds per week within the next 10 years, which will aid in significant job creation. There will also be opportunities created throughout the supply chain on the farming side too. We have already invested around R200 million for farm expansion to service the new abattoir as well as have purchased all the equipment from a plant in the United Kingdom, which we dismantled and shipped across. Additionally, we have completed an Environmental Impact Assessment (EIA) and are busy with securing energy supply to put up this third plant,” details Wilkinson.
Currently, a handful of large corporate players and importers control the chicken market in South Africa with a portion of their products being fresh but most opting for injected meat, portioned, frozen, or imported (or a combination). The ever-increasing demand from a health-conscious and inquisitive consumer market has bolstered Sangiro as it aims for increased market share. Estimated to contribute around R60 billion to the country’s GDP, this largest sector
// WE HOPE TO INCREASE OUR VOLUME TO TWO MILLION BIRDS PER WEEK WITHIN THE NEXT 10 YEARS
//
© Sangiro
INDUSTRY FOCUS: AGRICULTURE
of the wider agriculture industry is an imperative, and Sangiro recognises its responsibility.
The company has a strong command over its pricing thanks to deep involvement across the value chain. Andrew Wilkinson looks after the farming operations, hands-on, managing day-to-day operations across the company’s owned farms and working closely with contract growers, ensuring each lives up to the Sangiro quality hallmark. Legh looks after abattoir operations, and the pair collaborate successfully across all inputs to ensure smooth processes. Recently, Andrew and Legh appointed a Managing
Director, Wes Schwimmbacher, a poultry man through and through with 26 years’ experience, to beef up their highest level of management and to assist with continuing the growth curve the company has witnessed over the last 12 years.
Whilst Sangiro has been a picture of success so far, the poultry industry does not come without risks. Issues out of their control include load shedding, avian influenza and fluctuations in feed prices driven by external markets. To mitigate these risks, the Sangiro team is constantly strategizing the longer-term agenda.
“Currently we have five large generators as a backup. Electricity is
certainly a challenge,” says Wilkinson. “At the new site, we will need some stability as it is a multimillion Rand investment. We have to be sure that we can operate effectively. We are opting for a self-build project where we will build everything including the whole eight km line ourselves. That means we will only rely on Eskom for approvals and indication of where we can join the network.
“We hope to communicate with government as we need to prioritise the project because of the number of jobs that are waiting to be taken up,” she adds.
“As part of our integration
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across the supply chain, we want to investigate a feed mill. We are also investigating a hatchery for day old chicks. There is room for us to expand and I’m not yet sure exactly how that growth path will look, but we certainly have big ambitions.”
Newly created jobs will be monitored by a freshly developed management cohort that is busy learning best-practice right now. Nurtured internally, and trained by a highly committed and competent senior team at Sangiro, the new facilities in the Western Cape and Gauteng will benefit from the energy and enthusiasm of a management team created specifically for delivering industry leading operations.
“Apart from 2020, with Covid, we have grown consistently 10-20% year-on-year in terms of volume, and we have learned a lot,” says Wilkinson. “We have stepped up second and third tier management in our current plant and we are breeding strong supervisory and inhouse technical
skills. I am immensely proud of the team we have from top to bottom”
PEOPLE WANT QUALITY
The impressive growth at Sangiro has been down to a combination of hard work and an unrelenting focus on quality. Andrew Wilkinson’s industry knowledge alongside Legh Wilkinson’s understanding of people, trouble shooting skills, process management knowledge, and relationship building qualities have created a strong culture that keeps excellence at its heart.
“We are a small family business that became big very fast and we still do most of our work inhouse,” Wilkinson smiles, adding that her team is long-standing with a monthly attrition rate of less that 0.2%.
“We have honed our skills when it comes to doing things really well but cost-effectively. Our team is incredible and delivers 150% commitment at all times.”
This commitment keeps the brand top of mind on customers who want to start with a high quality product for their processes. Directly
and indirectly, through a dedicated customer base, Sangiro’s product is reaching far and wide in South Africa and Wilkinson hopes to develop access to Sangiro products into rural communities where a reliable source of protein is required but not always delivered by traditional marketplaces.
“It is the cheapest source of protein in the country. Because it is a cost-effective source of protein, people also want quality,” Wilkinson states, adding that many people have developed a mentality that they would rather pay R1 extra for chicken that is fresh and not injected.
“Retailers are now more accessible to rural communities as the country has developed. There are small retailers who can provide fresh chicken to the rural communities and that has been a big part of our success,” she adds. “We are 70% whole bird with much of the processing and other input happens elsewhere. It’s a model that is popular in some global markets and we have chosen to follow that.
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Legh and Andrew Wilkinson
INDUSTRY FOCUS: AGRICULTURE
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We are involved with Spar and a lot of our chicken goes to our own depots before being distributed to smaller retailers and restaurants. We have a big wholesale business where other wholesalers can buy a quality product from us before freezing or processing in their own way. This is A-grade locally produced and not importdumped chicken. This allows them to produce a quality frozen product and not something cheap and nasty.”
With a growing depot network across Mpumalanga and KwaZuluNatal adding to the sites in North West and the Western Cape, this national footprint allows for access to all markets. Currently, there are no plans in place to export to neighbouring countries
because of the focus on fresh quality, but when the new facility in the Western Cape is complete and the new site in Gauteng is up and running, Wilkinson says that there could be potential to grow alongside customers with a small frozen division if the market dictates. Currently, South Africa is a net importer of chicken despite its well-established poultry-agri sector.
The long-term goal for the company is to join the industry leaders in terms of scale around the country. Currently, a handful of corporate players control much of the market and Sangiro wants more of the share.
“We want to invest where we see impact,” she says. “There is a small school that many of the children of our staff attend. We have started investing money there, including a new perimeter fence
for security and bathroom facilities. The school receives little funding and we see this as an opportunity to do something to address a fundamental problem for our economy which is poor education and healthcare. Individuals must make choices to make a difference and if enough do this then we will start to solve problems quicker.”
The social initiatives put in place by Sangiro are deliberate and direct, and have a meaningful impact immediately. The company doesn’t invest because it has to but because it wants to, and this feeds into the focus on quality. A quality community will help the company to grow and so Wilkinson says Sangiro wants to invest further into those around the business. This includes the supply chain which has already benefitted.
“We have grown businesses alongside Sangiro,” she says. “Packaging suppliers Avon Packaging Converters (APC) and West Rand Box (WRB) have grown together with us over the years. West Rand Box has been our sole box supplier for 11 years with an outstanding record of 100% quality supply and ethical trading and we have built a very solid supplier-customer relationship, which we value immensely. Additionally, we have worked hand-inhand with Avon Packaging Converters, our sheeting and bag suppliers, to develop packaging requirements of a high quality with a significantly reduced waste element, which ultimately is recycled at their plant. Through our network in the poultry industry, APC, has embarked on suppling a number of the corporate players and is developing
a reputable name within and beyond the poultry industry in South Africa.”
A business key to the poultry sector and one revived from business rescue, APC is now run by Legh’s younger brother and sister, David and Kristin Wilkinson – another mean Wilkinson combination.
Working closely with suppliers also contributes to the company’s ‘Know Your Farmer, Know Your Food’ tagline. Relationships through the supply chain are personal, allowing for quick decision-making and a nimble approach. By keeping much of the company’s activity within a tried and tested team, quality is uninterrupted.
“We are hardworking, and we want to continue the legacy that has already been built,” Wilkinson declares. “We have around 30 vehicles and
we do 90% of our own distribution. We don’t outsource any of the technical support. We do all of our own maintenance; we do all of our own plant cleaning – we are lean operators with a very dedicated team.”
As the company grows, its ethos will not change. Knowing the farmers, understanding the abattoir, and building fundamental relationships with retailers and wholesalers, Sangiro has found the recipe for triumph.
“It’s not about money, it’s about success - an early teaching from my father. We have a common vision and our dynamic works really nicely,” Wilkinson concludes.
