Friday, April 20, 2012

Beyond poultry, Suguna eyes ready-to-eat foods

Coimbatore-based Rs 4,200 crore Suguna Poultry ( B Soundararajan, chairman, Suguna Foods) wants to grow beyond poultry. The company has renamed itself as ‘Suguna Foods’ in line with its ongoing efforts to provide a gamut of products in the foods category. The company is expanding the portfolio of offerings to other livestock products, ready-to-eat vegetarian foods and milk and milk products, while increasing its retail presence.

At present, processed and ready-to-eat chicken contributes to 95 per cent of Suguna’s revenue, with the rest coming from eggs, poultry feed, poultry vaccine and soy oil. As it moves into a larger space, Suguna expects its poultry contribution to come down to 70 per cent in the next five years.

The new products coming out from Suguna Foods will include processed meat of turkey, fish, lamb, and emu under the brand ‘Suguna Exotic’. At present, the company sells poultry under three brands — Suguna fresh chicken, Suguna Anytime frozen chicken and Suguna Homebites ready-to-eat chicken. “The foods category is very large and entering the space will augment further growth. Unlike contract farming in poultry, the company will initially be buying the livestock from farmers, processing and selling is
through its own retail stores and through other stores. The capacity of our processing facility has been increased from 900 tonnes per month to 1,500 tonnes. This is scalable to 3,000 tonnes per month,” B Soundararajan, chairman, Suguna Foods.

The new products too will be sold through the company’s retail channels. Suguna plans to increase its retail store count from 95 to 500 in the next two years in the existing markets of Tamil Nadu, Karnataka and Kerala. Suguna also has been supplying 250 tonnes of poultry per month to food chains such as Marry Brown, McDonald’s and KFC. Besides poultry feed, the company has launched cattle feed and will soon be producing aqua feed and pet feed. While the ready-to-cook vegetarian foods will be launched by the end of the year, liquid milk supply too will start in next four to five months, he said.

“We have been investing Rs 200 to Rs 250 crore annually on our poultry business. As poultry does not need much capex in the coming years, this will now be utilised for the new verticals. The funds will be generated through internal accruals and debt,’ he said.

“We aim to achieve turnover of Rs 20,000 crore by 2017. This does not seem difficult as we have grown from Rs 7 crore to Rs 100 crore between 1997 and 2000 and in next 12 years to Rs 4,200 crore,” he said.
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