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MERLOG FOODS
Merlog Foods Presentation
DTI, US EMBASSY & USAPEEC SEMINAR
Importers Guide
Poultry Meat Importers
1-3 March 2016, Pretoria
Presented by Georg Southey
Merlog Foods Presentation
DTI seminar
• Background to Merlog
• Size of South African Chicken Market
• Capital requirements
• Import process
• HDI (new importer) solution
• Questions
Merlog Foods Presentation
Background to Merlog
• Started from a home office in 1994 (son and father)
• Offered logistics services
• Grown over 22 years to become one of the largest WHOLESALE,
DISTRIBUTION, and IMPORT Businesses in SA
• Distributes 7 – 10,000 metric tons per month
• Equivalent to 280 -380 fcl (full container loads) per month
• Product make up: 60% frozen chicken
Merlog Foods Presentation
Background to Merlog
• www.merlogfoods.co.za
Merlog Foods Presentation
Automated Cold Store (www.merlogfoods.co.za)
Merlog Foods Presentation
DTI Workshop
• Merlog operates from 2 warehouses
• Head office and warehouse in Cato Ridge; Kwa Zulu Natal
• 12,000 pallet positions
• Warehouse Heriotdale; Johannesburg
• 2,800 pallet positions
• Fleet of nearly 50 delivery vehicles and trailers
Merlog Foods Presentation
SIZE of South African CHICKEN MARKET
• Annual Consumption 2,200,000,000 kg’s
• Imports (all cuts) 250,000,000 kg’s
• Local (all cuts) 1,950,000,000 kg’s
• Bone in Chicken imports 160,000,000 kg’s
• USA Quota 65,000,000 kg’s
• USA Quota as % of current imports +-40 %
• Number of containers 650/qtr 2,600 pa
Merlog Foods Presentation
• Importing is not a get rich “scheme”
• Successful businesses are built over time:
- Through:
• Market knowledge, trust, relationships, and reliability
Merlog Foods Presentation
Capital required
• Estimate cost for 1 container of chicken portions:
Product Chicken Leg 1/4
Quantity 27 mt
Price 750$/mt
Exchange Rate R 16/US$
Product 327,767
Duties 101,870
Other 23,901
Vat 56,662
Total R 510,200
Merlog Foods Presentation
Process to Access Quota
• Quota application to DAFF
• DAFF assess applications and allocates Quota
• DAFF issues Quota
• Importer Applies for Rebate Permit from ITAC
• Importer Negotiate to purchase product from Supplier
• Importer Applies for Import permit from DAFF
• Product is shipped
• Import Clearing and customs
Merlog Foods Presentation
• Veterinary Inspection and release
• Sale of Product
• Delivery to customer
• Collect Payment from Customer
• Repeat, repeat, repeat……
Merlog Foods Presentation
• Administration
– Negotiate price
– Agree shipping period
– Currency Hedging
– Insurance
– Clearing Instructions
– Payment terms Supplier (Cash Payment before receipt of Goods (CAD))
– Payment terms Clearing Agent
– Customer credit worthiness
– Customer payment receipt (14 – 30 days)
Merlog Foods Presentation
New Participants need a Coach or Mentor
• MERLOG FOODS
JV with MFS
51% HDI : 49% MF
• MEGA FOOD SUPPLIES
• HDI HDI HDI HDI HDI HDI
(Quota Holders)
Assistance with Sourcing, Logistics, Clearing, Marketing, Working Capital
Merlog Foods Presentation
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Merlog Foods Presentation
•QUESTIONS?
• Thank You for the opportunity to present today
Merlog Foods Presentation
Merlog Foods Presentation
