In a nation filled with an entrepreneurial spirit, Suguna Foods Pvt. Ltd is a billion-dollar Indian food products company based in Coimbatore, Tamil Nadu. Over a span of more than 35 years, Suguna Foods has transformed from a modest poultry farm to India’s leading poultry conglomerate. The company is involved in broiler farming, hatcheries, feed mills, processing plants, and vaccine manufacturing for poultry. Suguna Foods currently ranks among the top ten poultry companies worldwide with a net worth of 12,000 crores.
B Soundararajan, Chairman of Suguna Foods, said, “In the poultry market valued over INR 80,000 crore, only 5 to 6 percent of the business comes from processed meat. Capitalizing on the fact that the younger generation is keen to buy processed food, we plan to double up our processed food production in the next four years.”
Seeds of Success Planted in Humble Soil
Suguna Foods founders, B Soundararajan and GB Soundararajan started with an initial investment of just INR 5,000 in 1984. The visionary brothers began their journey by trading poultry-related equipment, feed, and chicks. Their first poultry farm was in Udumalaipettai, about 72 km from Coimbatore, Tamil Nadu.
This success didn’t come easy, though; their brilliant observation of the challenges faced by farmers due to a credit gap in the market ignited the spark of innovation. Recognizing the need for a transformative approach, Suguna Foods pioneered the concept of contract farming in India’s poultry sector in the 1990s. They collaborated with farmers, providing the necessary resources, technical expertise, and support to raise chickens.
From 1990 to 1997, the company grew gradually. In 1997, the company got its first sizable turnover of 7 crores. Soon, the founders expanded their business throughout Tamil Nadu and started professionalizing the company. At the end of the ’90s, Suguna Foods had an annual turnover of 100 crores.
At its core, Suguna Foods is driven by a commitment to rural development. The company’s mission extends beyond profitability, focusing on economic and social upliftment in rural India. Through contract farming, they have empowered over 40,000 farmers from 15,000 villages across 18 Indian states.
Suguna Foods has diversified its business across four distinct verticals:
- Farm Business (Suguna Chicken): This forms the company’s backbone, connecting them with poultry farmers across India.
- Feed Business (Suguna Feeds): High-quality feeds are produced from their feed mills, ensuring optimal nutrition for poultry.
- Processed Food Division (Delfrez): Suguna ventured into processed food with its DelFrez brand, catering to the preferences of the modern, convenience-seeking consumer.
- Soybean Business (Mother’s Delight): This vertical produces premium soybean oil, promoting good health through nutritious cooking.
The emergence of the COVID-19 pandemic had a profound impact on the poultry industry. Fears of transmission through meat consumption led to a sharp decline in demand. Despite facing this crisis head-on, the net worth of Suguna Foods in FY21 was ₹9,155 crores, an increase of ₹415.28 crore from its FY20 turnover of ₹8,739 crores. They implemented rigorous hygiene protocols, tested their chickens for viruses, and launched marketing campaigns to restore consumer confidence. The company’s sales have now returned to pre-pandemic levels and it has even expanded its operations.
Post-pandemic, in an attempt to collaborate with tech, the company has introduced its mobile application, through which customers can see which farms are available for selling live chicken.
The Vision and Expansion Plans
Suguna Foods’ vision revolves around value creation for all stakeholders. B Soundararajan’s son- Vignesh Soundararajan, is the current managing director and aims to double processed food production within four years from 30,000 tonnes per annum. Suguna Foods has transcended national boundaries. They ventured into the African market with operations in Kenya. The company plans to launch operations in Uganda in the coming year.
The unique business model of contract poultry farming and its success has attracted the attention of international bodies such as the Asian Development Bank (ADB), leading to a $15 million contract between the two companies in 2020. The subsequent growth steps include an IPO within three years and INR 100 crore processing plant in Mysore. Focusing on the future, Suguna Foods mobilizes to be the ‘protein leader’ and aligns with adept business ideals that strive to build a healthier nation for consumers.
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