BusinessPREMIUM

At the other end of the Rainbow

Retrenched workers struggle, years after chicken plant layoffs

Mzwandile Mlaba, a  former employee of Rainbow,  started his own hairdressing business after being retrenched by the  company in Hammarsdale. Pictures: Sandile Ndlovu
Mzwandile Mlaba, a former employee of Rainbow, started his own hairdressing business after being retrenched by the company in Hammarsdale. Pictures: Sandile Ndlovu

Mzwandile Mlaba, a father of three, worked for more than 10 years at RCL Foods' main P2 plant in the heart of the Hammarsdale industrial hub in KwaZulu-Natal.

But in December 2017 he was one of 1,200 RCL Foods workers in the Rainbow Chicken plants and various hatcheries to be retrenched.

Plans to revitalise the area may have received a boost with the visit to Hammarsdale in late January by Nomalungelo Gina, deputy minister of trade & industry, as part of the government's "revitalisation of industrial parks programme" across the country.

The plan is to assist industrial parks by attracting investors, creating jobs, stimulating industrialisation and boosting exports.

Gina said: "We are hoping that the big companies that have located here will find a way of contributing in assisting small businesses in the area to grow so that the impact is extended."

But until that materialises, Mlaba is likely to continue eking out a living as a hairdresser in a makeshift salon next to his RDP home in Mpumalanga township.

At RCL he earned up to R8,000 a month but nowadays he is lucky to make R2,000. On quiet days he uses his hands to make leather belts, which his sons sell at a local market.

Mlaba said the small severance package he received has long since gone on school fees and school transport for his children, and feeding his family.

"Life is tough but as long as I live I have to strive to feed myself and my family," he said.

Mandla Sibisi also has vivid memories of the 16 years he spent at RCL Foods' various poultry hatcheries.

He, too, was retrenched in December 2017. His unfinished, unroofed house is the only reminder of his earnings while at RCL.

"It has been very tough for my family, when you have been working for so long and suddenly it's all gone," said Sibisi.

He now grows vegetables to sell to his neighbours, along with face-cloths and other toiletries, in a peri-urban area near Cato Ridge.

Mlaba and Sibisi - along with hundreds of other former colleagues who are still unemployed - said they would welcome the chance to return to their old jobs, but they are not very hopeful.

Imports from Brazil

RCL Foods was one of the leading companies in the Hammarsdale industrial hub, employing more than 5,000 full-time staff and many more casuals in its poultry processing plants and its hatcheries in surrounding areas.

But today the company is a shadow of its former self, having been forced by cheap chicken imports to shed thousands of jobs, sell its farms and hatcheries and diversify into other sectors to survive.

The diminishing fortunes of RCL Foods are echoed in those of the Hammarsdale hub, which was also one of the biggest textile nodes in SA from the 1960s onwards.

Import statistics from the South African Revenue Service show that in 2009 SA imported 205,827t of broiler poultry meat. Five years later, in 2014, this figure had reached 392,820t of poultry meat

Gqibeni Mkhize stands among the ruins of a Rainbow hatchery. Mkhize was retrenched  when poultry imports left the   company struggling.
Gqibeni Mkhize stands among the ruins of a Rainbow hatchery. Mkhize was retrenched when poultry imports left the company struggling.

By 2018 poultry imports had reached 539,000t. The 2019 figures are still being tallied, but are expected to be 5% higher.

Imports have decimated the local industry, causing waves of retrenchments over the years. According to the South African Poultry Association (Sapa), more than 60% of the imports come from Brazil.

Not only has RCL Foods been laying off workers, but the JSE-listed company has sold 25 properties that once housed its massive hatcheries.

Some lie derelict along the N3 highway. Others are being turned into warehouses that are part of the inland port and light industrial zone under construction in the 152ha Keystone Park, between Hammarsdale and Cato Ridge.

A number of warehouses are sprouting here. Mr Price has a warehouse and distribution centre in the area and Pepkor, the owner of Ackermans, is building a R1.3bn warehouse.

Chicken imports from Brazil and the US have decimated the local industry, causing waves of retrenchments.
Chicken imports from Brazil and the US have decimated the local industry, causing waves of retrenchments.

Textile industry

RCL Foods declined to comment on whether it is planning to shed any more jobs or has plans to reverse the job losses.

"As the issue of dumping and cheap imports has been quite topical in the media for some years, there is a lot of information in the public domain," it said this week.

"However, since this is an industry matter, it would be more appropriate to direct your questions to the South African Poultry Association, which represents the industry."

Ziyanda Majokweni, spokesperson for Sapa, said recently that the local poultry industry sheds 1,069 direct and indirect jobs for every 10,000t of broiler meat that is not produced locally.

Sapa has worked with other stakeholders, including the department of trade & industry, on a poultry industry master plan unveiled two months ago, in terms of which the poultry industry has committed to invest R1.5bn between now and 2023.

The plan's five pillars include the establishment of partnerships to increase the production and availability of feed, and simultaneously ensure workers are provided with training and development opportunities.

One of the key pillars is driving domestic demand by making local chicken products affordable.

Sidwell Medupe, department of trade & industry spokesperson, said the government has put in place several trade measures to avert the demise of the poultry industry.

These include the implementation of anti-dumping measures in cases where there is evidence that poultry products are dumped in the South African market.

"The poultry industry is an important sub-sector within South African agriculture. It provides the most affordable source of animal protein to the South African consumer, which makes it critical to food security," said Medupe.

"Government remains committed to utilising industrial and trade policy tools in order to address the competitiveness and sustainability of the poultry industry."

Many in Hammarsdale are doubtful that the plan will bring back the glory days.

And it's not only the poultry industry that needs fixing.

It is estimated that the Hammarsdale industrial park lost between 30,000 and 40,000 textile jobs from the mid-'90s to 2002, mainly because of cheap imports from China. These job losses hit labour areas like Mpumalanga township hard, leaving thousands of households without a breadwinner.

Sthembiso Maphumulo, a 43-year-old former textile worker, said it was not easy for locals to find work in Hammarsdale.

He said big textile firms have been replaced by businesses that pay no attention to labour laws governing minimum wages and safe working conditions.

"It is an open secret that most of these factories don't employ local people. They only hire foreign men and women whom they make to work long hours for low pay," he said.

Malombo Nxumalo, a local councillor, said many people, including his family members, had relied on Hammarsdale factories and plants for employment.

"These companies, including textile firms, were brought here and given incentives so that local people wouldn't have to travel far to get employment.

"Our people are now suffering and something must be done to revive the textile industry," he said.

Members of the Hammarsdale business forum blame the government for its lack of foresight and coherent planning. Corruption, too, is blamed for the downward spiral of industrial areas like theirs.

Etienne Olivier has been running an industrial automation company for 28 years and also serves on the community policing forum.

He said he has seen the area move from being a formidable industrial powerhouse to its current, dilapidated state.

"I'm afraid if we continue this way we will lose thousands more jobs. For starters, the Eskom electricity bill has risen between 15 and 20 times from when we started.

"Taxes are high and corruption is so bad that businesses simply cannot cope.

"I have seen many who employed thousands, others hundreds of workers, but they had to simply close down."

He said the government is banking on the new warehouses built around the area to create jobs. "But warehouses are not labour-intensive and most firms would prefer automation instead of hiring more people. It's a catch-22 situation."

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