The company said it aimed to double its chicken output from 21,8-million chickens a year by 2010.
CEO Mike Davis said spending on the second phase of its four-step expansion programme in the next financial year would be R150m.
Sovereign this week reported its full-year results to end-February and said revenue had grown to R458,7m from R399m in the previous year.
Locally, the chicken market was worth between R12bn and R13bn a year.
Country Bird, SA’s third-largest producer of chicken, is listing on the JSE tomorrow as it aims to raise up to R1bn to take advantage of a shift towards chicken from beef.
Between 1960 and 2005, annual beef consumption per person dropped from 26kg to 13kg, while poultry grew from 2,5kg to 22,4kg, Country Bird said.
Davis said the company would enhance capacity at every stage of the chicken-farming process, from breeding through to the processing plant.
The company had less than 4% of the local chicken market.
The first phase of the expansion plan was completed in the past financial year at a cost of R99,5m, which was funded through operational cash.
Before embarking on expansion, it undertook a strategic review of its underlying operations and Davis said the company was committed to growth on the back of food consumption growth.
He said there had been a surge in domestic consumption of chicken, despite higher maize prices. Globally, fish production was declining, adding impetus to the demand for chicken.
However, Sovereign noted that the price of maize had increased substantially since October last year and it was expected to remain high until about March next year.
Davis said, though, that chicken was a more viable source of protein as it was cheaper than red meat.
Chickens were also more efficient than cows at processing vegetable protein into animal protein.
Athol Williams, MD of strategy consulting firm Taurus Associates, said growing chicken consumption was partially a result of a growing trend towards healthy living.
“Nando’s has taken off, not because chicken is nice, but because it’s healthier.”
The Sunday Times at the weekend quoted Kevin Utian, Nando’s SA MD, as saying the group, which had 250 outlets, planned to have double-digit growth every year.
Williams said that while fish was healthier than chicken, a lack of fish would spur chicken consumption.
A large fast-food chain in the US was rumoured to be looking around locally for a possible investment destination, and investors were receiving many proposals from entrepreneurs keen to start up chicken farms, Williams said.
Davis said that while Sovereign was concentrating on capturing a larger slice of the local market, it would consider exporting in the next four to five years.
He sought to build a strong business with good critical mass.
Williams said there was a trend towards free-range and organic foods globally, which could put pressure on battery farmers within the next few years.
