02 December 2013
28 November 2013
CEO’S REPORT FOR THE YEAR ENDED SEPTEMBER 2013
In my report in 2012, I said the following:
“Looking back at the last year the words that come to mind are-tough,frantic,hostile,challenging,demanding,busy,threatening,and most important of all,successful and encouraging”.
If that was 2012 then what adjectives do I use to describe 2013?
I think I should add the words “ugly, exhausting and frustrating.
2013 has been dominated by two issues-the ongoing “chicken wars” and the difficulties surrounding PRRS restrictions.
The year had barely started when the predictable attack came-in the form of a customs duty increase application for 5 categories of chicken imports from non EU countries.
It came with the usual hostility and insults from both SAPA and local poultry players.
It was, of course, accompanied by a host of lies, exaggerations, innuendo, untruths and half- truths.
And just who was attacking imports so vociferously? - An increasingly desperate industry aiming to punish SA consumers for its own business woes caused predominantly by its own failings created by adhering rigidly to a faulty business plan.
Their fragile plan is based on massive production and sales of Individually Quick Frozen Chicken (IQF) drowning in injected water-sometimes as much as 43% of the chicken is water.
These unsightly botoxed products have been used for many years by an industry devoid of any realistic plans based upon overcoming its own self-created woes, or meaningfully addressing the real economic challenges facing most industries and businesses in this country today.
Of course, ITAC showed its usual partial and obstructive side, making life very difficult for us.Or is ITAC merely inefficiently run?
Either way there is a huge price that is extracted.
We went into counter attack mode, and found a very respectful media who, by and large gave us a fair hearing.
Our media campaign,consisting of interviews in the press,radio and tv (and who could forget Georg Southey giving Mr. Kevin Lovell a sound beating on Carte Blanche?),a barrage of letters to the press,numerous press releases,a cartoon and information media campaign,and successful press conferences.There was also much political lobbying-not enough if truth be told.
Our top legal team also played a prominent role in our battles, which included laying a complaint with The Competitions Commission.
Our media campaign was so successful that at a Parliamentary Portfolio Committee hearing a few months ago, SAPA openly admitted that it had lost the media war.They have, in fact, been instructed not to debate with us in the media anymore.
They have however used well planned manipulative tactics in media interviews, and remain dangerous foes.
In addition, a ratings agency gave us a 52-48 point victory in a series of radio debates.
Members, loyal as always, joined in to help finance our battles via a voluntary poultry levy-but more about that later.
SAPA, with its budget of multi millions, had a huge cost overrun and turned to its members to help it out of the hole.AMIE, with a much smaller budget, managed its finances and costs admirably.
In the end, and predictably, duties were increased, but by much lower percentages than were applied for.How much did we save the industry by our bold and resilient defence?
Of course, subsequent to the financial year end there has been the initiation of an anti- dumping action against three EU countries.We are currently busy with our response.
There has also been a lot of noise emanating from SAPA about SPS related attacks on imports.
It has not been all defensive though-we also brought the brining issue clearly into the public eye, and the authorities are currently investigating enforceable brining limits.
We will keep up the pressure in this area, local industries extremely vulnerable achilles heel.
A few years ago AMIE was a small and semi-representative Association that was well run, but reactive.
Today we are a fairly large, representative Association that is very pro-active and punches above its weight.
AMIE has really shown itself as a force to be reckoned with, something we can all be intensely proud of.
Then there has been the ongoing PRRS saga.
Saga is an appropriate word to describe the PRRS issue.
Mike Burger has been AMIE’s representative on the PRRS technical committee and has been involved in dozens of meetings and interactions with DAFF and also our trading partners.Mike will lead a separate discussion on PRRS and the updated situation a little later.
At the end of the financial year we had the following paid up members:
Ordinary members 34
Associate members (Offshore) 29
Honorary Life member 1
This is a far cry from the total membership of 35 a mere five years ago.
There has been a noticeable growth in offshore membership over the last few years.
The year ended with seven executives serving on the committee, as per the constitution.
Meetings during the Year
A large number of meetings were attended during the year by the Executive team.
This includes six formal Executive meetings, RMIF, RMLA, and MIMC meetings, as well as numerous meetings with customs and veterinary officials, and foreign embassy representatives.There were also a number of Industry Working Group meetings and consultant briefings and feedback meetings related to the PRRS and anti-dumping actions.
A large amount of time was also spent in meetings and planning sessions with our legal team and consultants.
We also addressed two parliamentary portfolio committee meetings, and met with the Competitions Commission on a few occasions.
All in all, it was a very hectic year.
This aspect of our responsibilities has shown moderate success with lots of frustration.
We have found DAFF to be very slow in this area, citing staff problems and delays by exporting countries as the main reasons.
Of late though, negotiations for poultry imports have commenced with Ukraine, and discussions on MDM from the USA have commenced.
Communication and Website
From an average of two or three incoming emails and calls per day, the AMIE office, has, in tandem with our growing membership, become extremely busy, with many issues and queries reaching us on a continuous basis.
The general level of communication between us and members all over the world is extremely high.
Our aim in this area is to be constantly available and we have an average response time of less than 24 hours.
We have distributed 6 newsletters over the last 12 months, and also posted them on our website.
We have also developed good relationships with a number of overseas associations as well as their local embassy officials.
I would like to highlight our Brazilian, German, Australian, American, EU and Canadian associates and friends in this regard.
Our website, which is now five years old, is also experiencing growing traffic.
Currently the site sees about 15-20 visitors per day.
The site is updated regularly with statistics, newsletters, newsflashes and any membership changes.
This year it is my intention to make it more “newsy”-I think that I have done a poor job in this regard.
This issue is very important to us.We are aware that non compliance is a matter of great concern to our members, and it is important that the playing fields are leveled.
We receive reports from time to time about non- compliance in the industry and follow these up rigorously.
Regular interactions with both SARS and DAFF are held in order to address these issues.
Bacteriological and General Testing
AMIE has been involved in numerous discussions with DAFF regarding inconsistencies and what we believe to be unnecessarily strict regimens related to testing procedures.
We are fully aware of problems in the implementation of testing protocols, the
slow production of results, and in certain cases, an unacceptable rejection rate.
We cannot yet claim success in this area, but we will persevere.
MMA (Minimum Market Access)
In 2011, Amie applied for a reallocation of the quotas for sheep meat from SACU countries to historical importing countries (i.e. non SACU).
Our request was initially denied on the grounds that no changes would be considered while world trade negotiations (the Doha round) are still in progress, and also that any reallocation would have to include all products subject to such quotas.
However, after much perseverance, and support from the RMIF, this was granted, to be phased in over a three year period, commencing in 2013.
This year saw the first of these reallocations, with the second tranche becoming effective in 2014.
Import stats play a meaningful role in our lives, and form the very basis of the repeated attacks against us, so we need to be sure of our facts.
Herewith summary details of the latest 12 months available to us:
Total imports for the month were 32333 mt, compared to last year’s figure of 40860 mt, and volumes were more than 2000 tons down on last month (July).Over a 12 month period until AUGUST 2013 the figures are 4% above last year.
Chicken imports excluding MDM and gizzards were, at 12085 mt, well below average, but cumulatively 6% above last year.
Comparisons of 12 months cumulative figures with last year:
Pork Ribs---up 9 %
Mutton offal—down 6 %
Whole chickens—down 25 % (incl. carcasses)
Boneless chicken—down 14 %.
Chicken offal—up 17 %
Bone-in chicken—up 13%
Chicken MDM –up 1 %
Budgets for the coming financial year are in your packs, and I will take you through these documents, and be happy to answer any questions that you may have.
Monthly income and expenditure accounts are prepared and variances to budgets monitored closely.These are discussed at every Executive Meeting.
Amie’s accounting is well controlled, as confirmed by our auditors.
We currently have approximately R6m, in the bank (Mostly in a money market account, with a small balance in a market link account). (The only debtors we have are levy funds, while our only liabilities are our audit fees for the year and a small vat amount).
I will explain the breakdown of these funds as well as the collections and usage of the various levy inflows.
Our accumulated funds seem large, but we will have to pay out a lot of money on anti-dumping legal fees and costs, and we always need to consider our financial model carefully.
All our bank accounts are audited in detail.
We will always ensure, with the loyal and willing support of our industry, that we have sufficient funds to meet all challenges and attacks.
We have collected a total of just over R800, 000 in red meat levy funds over the 12 month period from October 2012 to September 2013. This is a slight misnomer in that approximately R200000 was owing to AMIE at year end.
The levy is a statutory measure and is legally enforceable.
In our constant quest to achieve a high level of professionalism in all that we do, while meeting challenges with vigour and expertise, we have appointed the top consultants in various fields, as well as the best legal brains in the country.A number of these experts are here today.
We are going to be vilified and attacked, with perhaps even greater energy than before, by a very frustrated local poultry industry, as well as some other local industries.
We are a threat to them because we have become powerful and efficient, but we seem quite able to always rise to the occasion.
We would much prefer to live in harmony and cooperation with our local counterparts, but if they refuse to do so, we will always be ready for them.
A word of thanks to the Executive Committee Members, who, at their own cost, attend Executive and other meetings, and unstintingly give of their time to attend to AMIE.
I would like to express a special word of thanks to our Chairman, Anthony Schneiderman.
I would like to thank all members for the way you communicate with me and the respect you always show me.
After five years this industry has grown on me.
It is a far cry from my previous experiences in another industry, but just as tough and ruthless at times.