The board of RCL Foods has agreed to the formal separation of the firm’s Rainbow business, which covers its poultry and feed operations.
The company's next steps will be to unbundle fully this business from RCL’s Value-Added Brands division to shareholders, and its listing on the Johannesburg stock exchange, RCL Foods reports.
Preparations for this development began in 2021 with a review of the business. Since then, they have explored different options for the separation of Rainbow. At the same time, a turnaround plan has been in progress to improve performance, with the aim for Rainbow to become a “sustainable, market-leading, and low-cost producer,” according to the company.
In support of the decision to unbundle Rainbow, the RCL board says it will allow the businesses to follow different growth ambitions and investment plans.
Already, the operations have been separated. However, details are still to be completed, such as financing arrangements, separation of support services, and stakeholder engagement.
The board stressed that it is “committed to transitioning the Rainbow business in a responsible manner which preserves the heritage and key strengths of Rainbow, and is in the best interests of Rainbow customers, staff and other key stakeholders.”
Listing is expected to take place within a few months, according to RCL Foods’ CEO Craig Cruickshank, reported the local Independent Online. The move will allow shareholders to choose to invest in the poultry and feed business or RCL’s value-added products, he said.
Cruickshank said that the decision to separate is a win-win for both RCL and Rainbow.
RCL Foods will be able to pursue is value-added branded products strategy, he said, while Rainbow will be listed as the benefits of breed transition are starting to take effect.
More on RCL Foods
Annual slaughterings of 197 million chickens make RCL Foods — under its Rainbow poultry operations — the second largest poultry company in Africa, according to WATTPoultry.com’s Top Poultry Companies survey.
In September of 2022, RCL Foods announced the first steps in the separation of its Rainbow poultry and feed operations from its other businesses.
Two years previously, the group had announced it was starting to review the future of its integrated poultry business.
