Daybreak retrenchments: Poultry giant fights for survival

One of South Africa’s most dramatic corporate collapses has reached a devastating milestone. However, hope remains – business rescue practitioners are championing a last-ditch effort to save what remains of the company and throw a lifeline to employees.

Daybreak Foods’ retrenchment process is drawing to a close, with 1 896 workers having already lost their jobs. Despite the scale of the losses, there is a potential silver lining: plans to bring one of the company’s abattoirs back online could preserve several hundred additional positions.

Senior business rescue practitioner Tebogo Maoto says retrenchment notices have already gone out, with roughly 440 employees expected to keep their jobs once the process concludes, though that number still depends on the retrenchment procedure being fully wrapped up. Maoto had targeted completion by 3 April.

The company has been under business rescue since June last year, after it ran out of money to pay staff and suppliers and could no longer afford to feed its chickens, a crisis that forced the NSPCA to step in and cull thousands of starving birds.

Maoto took over as business rescue practitioner in May, initially aiming to protect around 2 800 jobs and deliver a return for the company’s shareholders. He says the retrenchments became unavoidable after Daybreak’s application for the Temporary Employer/Employee Relief Scheme (TERS) was turned down, because the company hadn’t submitted audited financial statements by the end of 2025.

The funding raised so far has covered the emergency phase of the rescue process. Additional money earmarked for the next reactivation phase (partly secured already) is intended for capital spending, rebuilding the poultry flock, restarting operations and repairing infrastructure, rather than for retrenchments or severance pay.

By August last year, the Public Investment Corporation, Daybreak’s sole shareholder, had already put in R1.7 billion to keep the business afloat, including a R400 million injection specifically aimed at heading off liquidation and clearing the way for business rescue instead.

According to Maoto, the search for strategic partners is complete, with offers now in front of shareholders for consideration. At the same time, technical assessments of the Sundra and Delmas abattoirs are under way, with findings due around mid-April that will help determine how operations there can resume.

Maoto says Daybreak Foods remains focused on building a sustainable agricultural business that supports South Africa’s food security and rural economic development, while still delivering long-term value to its shareholders.