Suguna Poultry to invest Rs 120 cr

Coimbatore-based Suguna Poultry Farm Ltd will invest Rs 120 crore in next two years for expansion in north India, as part of a strategy to achieve an almost three-fold increase of its turnover at Rs 3,000 crore by 2010.

"We have entered Punjab last month and now plan to enter Haryana, Delhi and some parts of Uttar Pradesh and Rajasthan in the coming months," Suguna Group Managing Director B Soundararajan told reporters here.

The company would invest Rs 120 crore in the next two years for setting up feed mills, creating hatcheries and meeting working capital requirements.

He said the company's production capacity will increase to 65 lakh broiler per week by 2006-07 fiscal from the current level of 50 lakh broiler a week.

Suguna Poultry is also likely to offload 5 per cent of its stake as private equity, besides planning to come out with an IPO next fiscal for further expansion.

"At present, we are going in for a private equity with International Finance Corporation. They have allocated 30 million dollar as debt and equity. The discussions are going on and it will be over by mid-september," he said, adding that "the company is planning to come out with an IPO in 2007-08 fiscal".

On the company's other plans, Soundararajan said it would set up two chicken processing units in Bangalore and Nashik with an investment of Rs 20 crore each in 2007-08. It has one such unit at Coimbatore.

The company would also focus on layer segment and has tied up wih Germany-based Lohmann Group for technical support.

Soundararajan said the company had been achieving growth of 30 per cent year-on-year compared to industry average of 13-14 per cent. "Our topline stood at Rs 1,100 crore in 2005-06 and we expect that to reach up to Rs 1,400 crore by this fiscal and Rs 3,000 crore by 2010," he said.

On the company's exports performance, which stood at Rs 25 crore in 2005-06, he said the company was presently supplying about 6,000-7,000 tonnes to middle east countries through a joint venture, but expected to start exporting to Japan in next two months. It plans to tap European Union countries in next fiscal.

The company had initiated the contract farming concept in 1993 for producing broilers and presently 12,000 farmers are benefiting through it.

"We plan to add 2,000-3,000 farmers every year under contract farming," he said.

Suguna Poultry, which has a market share of 14.5 per cent of the Rs 9,000 crore broiler industry, aims to capture the 40 per cent share of the north Indian markets, which is about Rs 1,000 crore in next two years, he said.

Besides, the company is also presently setting up two feed mill units in Bangalore and Nashik with an investment of Rs 40 crore each, which would increase the capcity to 10 lakh tonne from present eight lakh tonne.