Suguna Poultry created a new business model, one which has incubated growth, says ADELINE BERTIN It all began in the late eighties, when brothers B Soundararajan and GB Sundararajan, who ran a small chicken and egg shop in the tiny agrarian village of Udumalpet in Tamil Nadu decided the crash in chicken prices (in 1989-’90) was the right time — to expand their business. Suguna Poultry hatched its new expansion plan by helping indebted poultry farmers: they provided them with feed and health support — in return for eggs.
The success of this initiative gave birth to the Suguna “integrated business model”. In 25 years, this business plan has enabled the company to emerge as the leader in the Indian poultry market, which is highly-fragmented and dominated by small, local players. Suguna Poultry is now a Rs 2,030 crore company, covering over 15,000 farmers in 11 states across the country.
Suguna’s particular business model basically creates a win-win situation for both the farmer and the integrator. Explains Paresh Kumar Shetty, general manager: “The integrator enters into an agreement with the farmer and supplies the day old chicks (DOC), feed and medicines. The farmer also benefits from continuous training on broiler management and technology.”
The Suguna initiative has indeed transformed the lives of lakh of farmers and their families across rural India. “Suguna is a major contributor to growth and a catalyst in rural development. Our mission ultimately aims at providing more job opportunities for the rural population and to help them develop into entrepreneurs,” underlines Shetty.
Harish Garware, from the Indian poultry Equipment Manufacture’s Association (IPEMA), points out: “Suguna’s particular model has been very successful during the last decade and works very well in India. Indeed, many companies in the country have shifted by the time and are now following it.”
Being India’s biggest broiler producer, the company also ranks among the top ten poultry companies worldwide. However, India’s participation in the world poultry trade to date has been negligible. Identifying this as potential for growth, Suguna Poultry is planning to extend its sphere of influence into newer markets — both within the country and globally.
Suguna already exports to Southeast Asia, the Gulf and African countries. However, will the company be able to go pan-India with its current business model? Shetty is confident of success: “Currently, we are a poultry giant in India. Suguna has a healthy business model, which has enabled the company to spread from a small town to Asia’s leading poultry enterprise. So, of course, the company will definitely be able to expand its operations.”
Garware also believes Suguna’s business model can work everywhere in the world. “Just see what the EU and the US markets are doing: they are following us! The only difference is the level of automation, but with Suguna Poultry’s priority to target the global market, we will soon be able to follow their path. So all the opportunities are there, I think, for Suguna to expand and – why not? - conquer the global market.”
In a sector with big potential for further growth, Shetty identifies some of the growth options for Suguna Poultry: “Our ready to eat and ready to cook products are gaining a lot of demand among the people, irrespective of age,” he points out, adding: “Chicken, the most preferred lean meat, continues to increase in demand each day.”
Suguna, in fact, has grown at a very healthy 40 percent annually. Now, he says, the industry envisages growth prospects that would take it to Rs 13,000 crore in the next five years.
With its mastery in contract farming, Suguna has shaped the poultry industry to its current position. But the company wants to achieve more: for Shetty, this success has only egged on Suguna to “emerge as a food company”. With its ability to innovate in business plans, there’s little doubt that as the industry grows, Suguna is poised to be cock of the hoop.
The success of this initiative gave birth to the Suguna “integrated business model”. In 25 years, this business plan has enabled the company to emerge as the leader in the Indian poultry market, which is highly-fragmented and dominated by small, local players. Suguna Poultry is now a Rs 2,030 crore company, covering over 15,000 farmers in 11 states across the country.
Suguna’s particular business model basically creates a win-win situation for both the farmer and the integrator. Explains Paresh Kumar Shetty, general manager: “The integrator enters into an agreement with the farmer and supplies the day old chicks (DOC), feed and medicines. The farmer also benefits from continuous training on broiler management and technology.”
The Suguna initiative has indeed transformed the lives of lakh of farmers and their families across rural India. “Suguna is a major contributor to growth and a catalyst in rural development. Our mission ultimately aims at providing more job opportunities for the rural population and to help them develop into entrepreneurs,” underlines Shetty.
Harish Garware, from the Indian poultry Equipment Manufacture’s Association (IPEMA), points out: “Suguna’s particular model has been very successful during the last decade and works very well in India. Indeed, many companies in the country have shifted by the time and are now following it.”
Being India’s biggest broiler producer, the company also ranks among the top ten poultry companies worldwide. However, India’s participation in the world poultry trade to date has been negligible. Identifying this as potential for growth, Suguna Poultry is planning to extend its sphere of influence into newer markets — both within the country and globally.
Suguna already exports to Southeast Asia, the Gulf and African countries. However, will the company be able to go pan-India with its current business model? Shetty is confident of success: “Currently, we are a poultry giant in India. Suguna has a healthy business model, which has enabled the company to spread from a small town to Asia’s leading poultry enterprise. So, of course, the company will definitely be able to expand its operations.”
Garware also believes Suguna’s business model can work everywhere in the world. “Just see what the EU and the US markets are doing: they are following us! The only difference is the level of automation, but with Suguna Poultry’s priority to target the global market, we will soon be able to follow their path. So all the opportunities are there, I think, for Suguna to expand and – why not? - conquer the global market.”
In a sector with big potential for further growth, Shetty identifies some of the growth options for Suguna Poultry: “Our ready to eat and ready to cook products are gaining a lot of demand among the people, irrespective of age,” he points out, adding: “Chicken, the most preferred lean meat, continues to increase in demand each day.”
Suguna, in fact, has grown at a very healthy 40 percent annually. Now, he says, the industry envisages growth prospects that would take it to Rs 13,000 crore in the next five years.
With its mastery in contract farming, Suguna has shaped the poultry industry to its current position. But the company wants to achieve more: for Shetty, this success has only egged on Suguna to “emerge as a food company”. With its ability to innovate in business plans, there’s little doubt that as the industry grows, Suguna is poised to be cock of the hoop.
