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Dream and Reality...

21 April 2004

Is the once proud, successful and leading South African ostrich industry on its way to a catastrophe, a failure and a loss of world leadership?

The prophets of doom who believe that such a disaster is an unavoidable certainty, refer to many signs which they see and identify as clear as anything. They refer to competition popping up in many places world-wide, a South African inability to adapt to forces of globalization, market competition, problems on the world leather market, a possible slump in the short-lived meat market highs, and many, many adverse domestic factors back home where a very traditional agro-based sector is adapting too slowly, unsuccessfully or even not at all, to the demands and the rules and expectations of the new democracy of South Africa – and many more negative factors.

Although there may be difficulties, and these are acknowledged by the official umbrella organization, the South African Ostrich Business Chamber (SAOBC), the Chamber takes the stand that these are not insurmountable. On the contrary, the SAOBC is taking measures and is putting strategic steps in place to assist the ostrich industry in gaining an unchallenged, modern, innovative, united and highly successful position. The following paragraphs reflect the thinking of the SAOBC, and its associated leadership group, by which they plan to make the dream a certain reality.

An international group recently challenged a South African ostrich farmer during a visit to his farm. They challenged the farmer about the value of the supposed historical “vantage point” of the South African industry. He replied: “Yes, I admit that we are tremendously proud of our experience and traditions that go back to the 19th century. I am also proud of the fact that my ancestors and I possess a direct knowledge base and continuous exposure of 152 years of ostrich farming. But do you know what is the most valuable lesson that I have learned from the history and impressive records of the past? This first and foremost lesson: for a viable ostrich business, including farming, processing, marketing and promotion, you must CLEVERLY apply the good lessons from the past, to ASSIST YOU IN ADAPTING WHEN AND HOW, WITH HASTE AND WITH ALL THE MEANS OF THE TIME THAT YOU ARE LIVING IN. In our times this means as scientifically and as technologically correct as possible. We know that this industry has its definite cycles. Its definite ups and downs. Do not plan for tomorrow in the short term. Also plan for longer time horizons so that you may survive through the difficult periods that are sure to come.”

It was in 1838 that the British colony of the Cape of Good Hope, now the Province of the Western Cape of a free and democratic Republic of South Africa, exported its first ostrich feathers to Europe. When the numbers of wild ostriches decreased dramatically due the whim of fashion, efforts were made round about 1850 to tame and breed these relatively unknown birds. However, ostrich feather farming, as an organized undertaking, only came on line as from about 1863 when wire fencing and lucerne changed the face of farming.

From 1870 ostrich feather farming became extremely profitable. It was aided in no small way by the ingenious invention of an incubator for ostrich eggs in 1869. Between 1900 and 1914 the industry reached a zenith that is known as the second ostrich feather boom. It was a time of unprecedented wealth for both farmer and merchant.

In 1913 ostrich plumes ranked fourth by value on the list of South African exports after gold, diamonds and wool. At that time, a pound of feathers in weight (equaling 454 grams) regularly fetched twelve British pounds in value. In considering the real meaning of this price, one has to keep in mind that, in comparison, a teacher at that time seldomly earned more than 100 pounds a year.

STARTING ANEW

In 1914 the industry virtually collapsed overnight – with close to a million ostriches in South Africa. Bankruptcies were the order of the day.

A new industry was born, marked by a number of historical highlights –

  • The one-channel cooperative marketing system was established in 1959.
  • The first abattoir was built in 1964.
  • A tannery became operational in 1970.
  • The one-channel marketing system was abolished in 1993.

Since deregulation, ostrich activities spread from its original concentration in the Little Karoo region (which maintains its prominent role) into the Southern and Western Cape, and to the provinces of the Eastern Cape, Free State, Gauteng, Limpopo, Mpumalanga, North-West and the Northern Cape.

South Africa was the only country in the world that had slaughtered ostriches on a commercial basis prior to 1993. After 1993 many places in the world witnessed attempts to follow the success of the leading country in commercial farming, with this product which is known to have the best feed-to-weight-gain ratio.

Although South Africa’s share of world production is down, from a high position above 80 per cent, to about 65 per cent, this is largely attributable to the enthusiastic keenness in the rest of the world to share in the fantastic outputs, than to any downward trend in South Africa overall production. This country leads the world in development and research, with a devoted ongoing commitment to innovatively take the ostrich industry across new horizons of success.

ORGANISATIONAL STRUCTURES

The founding of the South African Ostrich Business Chamber on 26 November 1998 was a remarkable and positive step. The Chamber has four directors representing producers and four directors representing the processors. The first staff member started work on 1 July 2000, and the first full-time manager on 1 March 2001. The mission of the SAOBC is to promote a sustainable, economically viable South African ostrich industry through co-operation between stakeholders. The first National Ostrich Conference (organised by the SAOBC) was held in Port Elizabeth 2001, and the second in October 2002 in Oudtshoorn.

The SAOBC has been active with attempts to create an enabling environment for ostrich products. Its Manager facilitated a one-day workshop on 30 July 2001 amongst NOPSA members. The meeting agreed that fragmented and uncoordinated marketing is the most serious problem and decided to take the process forward via a follow-up workshop. The second workshop, in August 2001, was characterized by some intense discussions regarding the SAOBC’s

  • strategic priorities
  • vision
  • financing
  • marketing and promotions
  • research and development
  • quality control/grading.

The second workshop concluded when delegates voted unanimously “in favour of some kind of a body that can create industry control in terms of items like marketing, pricing, financing, grading, code of conduct, etc”. Eventually it was agreed that the process would proceed within three working groups in order to add the most practical momentum to its desired outcomes. The three groups would focus on structures, funding and generic marketing. It is not at all easy to take such a complicated process forward. The SAOBC is once again paying special attention to this matter, but in its widest possible conceptualization. The National Ostrich Processors of South Africa (NOPSA) unites the interests and efforts of processors. It has 21 members and exists since 1997. The objectives of NOPSA, of course, include promotion of the interests of the ostrich processing industry in South Africa.

The South African Ostrich Producers Organisation (SAOPO) works along provincial lines. Ostrich producers throughout South Africa register as members of their respective provicial ostrich producer organizations. Their mission is to provide its members with a policy and a business environment, in which they may act successfully and profitably over the long term. It aims to be a national representative body for ostrich producers. The provincial distribution of ostriches is roughly as follows: Western Cape 60%, Eastern Cape 34% and the other provinces 6%.

A GLOBAL PERSPECTIVE

Since deregulation of the South African Ostrich Industry production extended to a large number of other countries in the world. An ostrich producing reality is only to be defined when it carries out all stages of the production chain – from breeders through to slaughter plants and tanneries. With this in mind only South Africa, Namibia, Zimbabwe and Israel fit currently into this category. Whilst many are having difficulties, there are initiatives to develop ostrich along professional lines and these could grow to have good levels of production.

Since 1993, world ostrich slaughtering increased substantially from approximately 224 000 in 1993 to approximately 580 000 in 2001 (produced by 29 countries). World production is increasing. Exporters of ostrich products and especially meat products will have to comply with higher standards, which could lead to higher costs.

After deregulation, genetic material was freely exported from South Africa. This resulted in the trading of eggs, chicks and breeder birds. Live ostriches were widely sold to international buyers. Soon ostrich farms mushroomed everywhere, but no ostrich industry developed in the farming/slaughtering/deboning/tanning/marketing, etc sense of a production chain.

In the past ten years the world saw the “rise and fall” of ostrich industries in a number of countries around the world. The reasons for this could include low profit margins, unsuitable climate conditions, lack of supporting infrastructure, etc.

IN SUMMARY

South Africa remains the main role-player and leader in the world ostrich industry. The South African ostrich industry is of the opinion that the current status of export markets for ostrich products is the result of development and hard work done by South African ostrich producers, processors and manufacturers over a long period. South Africa was and still is the leader in production and supply to the world markets that was developed by South Africans. Since deregulation in 1993, competitors around the world introduced their products to the existing market without really developing new markets or developing new products. This resulted in a more unstable market for South African ostrich products with a lower income and high risk for producers and manufacturers.

Dream? Reality? Amidst tough realities as discussed above; also with some fierce factors on the global stage, South African ostrich business leaders find no time to dream, but only to work hard in successfully maintaining and expanding its position of world leadership.

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