NEWS RELEASE                                                                                               7 May 2002

END OF AN ERA AS CITY OF CAPE TOWN PUTS MAITLAND ABATTOIR UP FOR SALE

The City of Cape Town will save millions of rands from its decision to sell the Maitland Abattoir to the private sector, says the City’s Executive Committee member for Trading Services, Councillor David Erleigh. 

Originally built in 1914 at a cost of R50 000, the abattoir is the only red meat auctioning facility and the only Council-owned abattoir in South Africa. Not only is it the biggest abattoir in South Africa, but it also has the highest quality control measures and also produces kosher and halaal meat. 

“Like the Epping Fresh Produce Market, the Maitland Abattoir has suffered since deregulation in 1993,” said Councillor Erleigh. “Deregulation resulted in the free movement of livestock and meat and an increase in the number of privately-owned abattoirs. Consequently, Maitland has been operating at only 50 per cent of capacity for the last four years and the number of staff has dropped by 100 to 135,” he said.

 Many of the operations at the abattoir are currently outsourced. 

Consultants appointed by the City have reported that the abattoir has been running at a cumulative loss of R26 million since 1995 with a projected loss of R8 million this financial year.  

Councillor Erleigh said that after careful consideration of the options, the City had accepted the consultants’ recommendation to sell the business as it stands.

“The decision we have made is financially beneficial to the Council, provides the opportunity for financial efficiency in the future operations of the abattoir, will eliminate future capital commitment by the Council and will minimise risk to the Council.

“Apart from the business value of the sale, we can sell the balance of the land for about R8,4 million, get monthly rental income and avoid immediate capital expenditure of R22,5 million to comply with health regulations. To this you can add ongoing capital expenditure of R1,3 million a year and an annual operating loss of about R9 million.”

Councillor Erleigh said a full financial analysis indicated that the best option was to sell the business “as is” and to redeploy employees elsewhere in the Council. A highly qualified vet and meat inspectors would be transferred to the City’s Health Department.

To guide the complex process of the sale, the Council will appoint transactional advisers.

“The Maitland Abattoir has been around for a long time, and we believe it will continue to operate to the highest standards with the City continuing to enforce strict controls,” said Councillor Erleigh.

“Deregulation of the meat industry brought about the end of an era,” he said. “It is now time to pass financial responsibility for the abattoir to the private sector.”

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