Latest news with #LehlohonoloAndrewMakenete
Daily Maverick
23-05-2025
- Business
- Daily Maverick
Daybreak Foods business rescue — a new board fails to instil hope in workers
In a move that's part lifeline, part last rites, the Public Investment Corporation has thrown its weight behind Daybreak Foods' move into business rescue, announcing a freshly reconstituted board and a renewed — if slightly desperate — commitment to saving South Africa's embattled poultry giant. But workers remain unconvinced. On Monday, 20 May, the Public Investment Corporation (PIC) confirmed its support for the Daybreak Foods board's decision to enter business rescue, describing the process as 'the best path to preserve the company's value and potential, saving approximately 3,000 jobs'. With the company's finances resembling a henhouse after a fox visit, the PIC's R74-million cash injection is meant to keep the lights (and incubators) on while a business rescue practitioner is appointed to hatch a credible turnaround plan. Despite a flurry of official statements, a reconstituted board and the promise of business rescue, hope remains scarce on the factory floor at Daybreak Foods. Thousands of workers, partially paid for April, say this development has done little to lift their spirits. One anonymous worker told Daily Maverick, 'We don't have hope now. Our hope for Daybreak Foods is diminished.' They added that they had received only half of their basic April salary and nothing for their overtime. The worker said the company had not communicated anything about these delays, leaving employees in the dark. They are now awaiting their May salary, which is expected to be paid on Friday, 23 May, since the usual payday of the 25th falls on a Sunday. Another employee echoed this sentiment, saying, 'Things are very bad there. They are not being fully transparent with us, and there is no direct communication, so we do not have hope.' The employee said workers simply wanted the truth — no matter how grim — so they can understand the company's current position and know whether they have a future with it. The PIC, which holds the dual distinction of being both a major shareholder and creditor, has made it clear that Daybreak must be rescued, not just for the sake of the workers, but to 'realise returns for clients and their beneficiaries'. Meet the new board Before the feathers hit the fan, the PIC had already reconstituted Daybreak's board. The new line-up reads like a who's who of agriculture, finance and — crucially — damage control: Dr Cynthia Charlotte Nkuna (retained interim chairperson): A poultry vet with an MBA and a background in biologicals. If anyone can spot a sick chicken — or a sick balance sheet — it's her. Lehlohonolo Andrew Makenete (interim deputy chairperson): Agricultural economist and policy wonk. Tshokolo Petrus Nchocho: Development finance veteran, former CEO of the IDC and Land Bank. Kgampi Jack Bapela (retained): Agro-processing dealmaker. Esethu Ayanda Dazana (retained): Chartered accountant and transformation specialist. Brian Luthuli Mavuka (PIC): PIC's head of finance, because someone needs to keep an eye on the purse. Martinus Philipus de Jonge (PIC): Investment executive and former interim CEO of Daybreak — back for another peck at the problem. The board, together with the PIC, has pledged full cooperation with the business rescue practitioner to implement a 'sustainable turnaround strategy.' How did we get here? Daybreak Foods' decline unfolded over several years, marked by mounting financial strain, management instability, and operational breakdowns. Originally part of Afgri, the company was acquired by a PIC-backed BEE consortium in 2015, with high hopes for transformation and growth. However, by 2017, just two years after the acquisition, Daybreak began facing severe financial difficulties amid increased competition from cheaper imported chicken, governance challenges and operational mismanagement. The PIC assumed full control in 2017, but despite efforts to stabilise the company, including board changes and management reshuffles, Daybreak's liquidity worsened. By late 2024, the company had failed to repay R42-million owed to its largest contract grower and defaulted on a R100-million emergency loan. A requested R250-million bailout was declined by the PIC in early 2025, precipitating the resignation of CEO Richard Manzini and the executive team. This leadership vacuum triggered an operational collapse. Feed deliveries stopped, contracts fell through, and workers and livestock were left stranded. Efforts to shift consumer demand from frozen to fresh poultry were undermined by rising feed costs, avian influenza outbreaks and delayed funding. Animal welfare deteriorated drastically, culminating in the mass euthanisation of more than 350,000 chickens under horrific conditions. The National Council of SPCAs intervened with a court order to halt inhumane culling and enforce adequate feeding of nearly 600,000 starving breeder birds. Workers faced unpaid or partial salaries, forced weekend work without overtime pay and poor communication from management, with protests in early May met by the police using rubber bullets. Leadership instability was rife, with four CEOs in four years, legal battles with security firms, and the abrupt resignation of board chairperson Bojane Segooa in May 2025 after securing a R625,000 payout amid strikes and internal conflict. The crisis has since drawn the attention of the Department of Labour, the Congress of South African Trade Unions (Cosatu) and political parties like the Democratic Alliance (DA), which have called for urgent investigations into governance failures and PIC oversight. As Daybreak enters business rescue with a reconstituted board and renewed PIC backing, the challenge remains to restore financial stability, protect jobs and rebuild trust among workers and stakeholders alike. Daybreak Foods' slow unravelling is a stark illustration of the complex challenges facing state-backed enterprises, where financial pressures, governance lapses and social responsibility converge with profound consequences. The path forward demands transparency, accountability and decisive action to safeguard the livelihoods of workers, the welfare of animals and the stewardship of public funds in South Africa's poultry industry. DM
TimesLIVE
20-05-2025
- Business
- TimesLIVE
Daybreak Foods placed in business rescue, hopes to save 3,000 jobs
The Public Investment Corporation (PIC), a major creditor and shareholder of Daybreak Foods, says it supports the Daybreak Foods board's decision to place the company in business rescue. The PIC said on Monday it was of the firm belief that the company can be rescued and that business rescue is the best path to preserve the company's value and potential, saving about 3,000 jobs and realising returns for clients and their beneficiaries on their investment. The PIC said the successful application to place Daybreak in business rescue paves the way to appoint a business rescue practitioner who will assist Daybreak to assess the extent of disruption to operations and produce a credible turnaround strategy for the business. The business rescue practitioner will work closely with the Daybreak board. 'The PIC has already undertaken several measures to contribute towards stabilising Daybreak Foods, which includes the injection of R74m in working capital that is intended to address the company's immediate liquidity needs.' Before the company was placed in business rescue, the PIC had reconstituted the board for Daybreak as part of interventions to stabilise governance and operations at the company. Members of the reconstituted Daybreak Foods board are: Dr Cynthia Charlotte Nkuna (retained, interim chair) Lehlohonolo Andrew Makenete (interim deputy chair) Tshokolo Petrus Nchocho Kgampi Jack Bapela (retained) Esethu Ayanda Dazana (retained) Brian Luthuli Mavuka (PIC), and Martinus Philipus de Jonge (PIC) interim CEO of Daybreak Farms. 'The Daybreak Foods board, together with the PIC, will fully co-operate with the business rescue practitioner to implement a sustainable turnaround strategy and plan to stabilise the business and ensure its viability.' TimesLIVE
