Daybreak Foods enters business rescue as  financial woes mount

SOUTH AFRICA  – South African poultry producer Daybreak Foods has officially entered business rescue after years of operational turmoil, financial mismanagement, and leadership instability. 

The move, backed by the Public Investment Corporation (PIC), is a last-ditch effort to prevent liquidation and save around 3,000 jobs at risk.

The announcement follows a series of critical setbacks for the once-thriving poultry company, which at its peak produced nine million chickens every 34 days across operations in Gauteng, Mpumalanga, Limpopo, and KwaZulu-Natal.

The crisis deepened following the resignation of board chair Bojane Segooa, who left after receiving a R625,000 (US$34,866) payout, and CEO Richard Manzini in March 2025—the fourth CEO to exit since 2021. 

The PIC had previously reconstituted the board in an effort to stabilize governance, appointing Dr Cynthia Charlotte Nkuna as interim chair and Martinus Philipus de Jonge as interim CEO.

Financial collapse and misuse of funds

Daybreak’s financial deterioration has been years in the making. Originally established in 2001 under Afgri and acquired by the PIC for R1.2 billion (US$66.9M) in 2015, Daybreak’s decline was first evident by 2017, when a PIC-seconded CEO declared it “technically insolvent.”

In June 2024, the company announced plans to issue R250 million (US$13.9M) in debt to upgrade water and abattoir technology. 

To avoid high-interest costs, the PIC extended a R250 million loan, but by year-end, funds were diverted from upgrades to cover livestock feed and staff salaries, as the company struggled to pay suppliers and employees.

The situation spiralled further when Shoprite initiated liquidation proceedings over an unpaid R100 million (US$5.5M) debt. Legal troubles mounted as the NSPCA revealed inhumane conditions and the starvation of 594,000 chickens, prompting additional court orders.

Failed funding and emergency measures

A final blow came on 16 May 2025, when the PIC failed to secure R500 million (US$27.8M) in emergency funding to address creditor claims, including a provisional liquidation order secured by Lakat Chicken. 

With legal counsel warning that contesting the liquidation was futile, business rescue became the only viable route.

On 20 May 2025, the PIC successfully applied to place Daybreak under business rescue. A business rescue practitioner will now be appointed to develop a turnaround strategy and assess the full extent of operational damage, working closely with Daybreak’s newly reconstituted board.

To address immediate needs, the PIC has injected R74 million (US$4.1M) in working capital, intended to sustain short-term operations and maintain jobs.

Sector-wide pressures

Daybreak’s downfall comes amid broader challenges in South Africa’s poultry industry: soaring input costs, depressed poultry prices, and fallout from the suspension of the Africa Growth and Opportunity Act (AGOA). 

Major producers like Astral Foods, Rainbow Chicken, Sovereign Food, Country Birds, and Quantum have also struggled to maintain profitability.