Mr. B Soundararajan started his poultry business with an investment of Rs.5000 about three decades ago and currently generates a turnover of Rs.5500 crore.,
Aself-made man who likes to do everything he does "with perfection" dropped out after Class Eleven to pursue agriculture at the suggestion of his father, who was then a teacher in a government high school.
“He encouraged me to do something on my own and I dedicated myself to agriculture. I felt that if I went to college and got a degree, I would end up looking for work, ”says Soundararajan, who grew vegetables for three years.
Lost Rs. 2 lakh in agriculture, then he worked in a furniture manufacturing company in Coimbatore for a year and a half without salary, then he moved to Hyderabad as a "one man army" for the associate grade agricultural pump company managing their sales and promoted in the province.
But the company was hit by the strikes and was unable to meet market demand. So I lost interest and quit my job, ”says Soundararajan, who returned to his village and ventured into the poultry business with his younger brother, G B Sundararajan.
Three decades later, as Managing Director of Suguna Holdings, Soundararajan sits at its head office in Coimbatore and directs the general activities of the group's subsidiaries, which includes its flagship poultry firm, Suguna Foods Private Limited.
Suguna Foods contributes 98 percent of the group's income and is associated with the livelihoods of 23,000 farmers in India, ”says Soundararajan.
Although they must be in the poultry business since 1984, it was absolutely in 1990 that Soundararajan and his brother introduced the idea of contract farming to poultry in the province.
Using this method, the brothers began to partner with farmers who would establish the poultry infrastructure on their land and provide the chicks, food, and medicine for the birds.
About every 45 days they bought the chicken from the farmers and sold it at the market. They used to pay 50 paise per kg of chicken at harvest time. (Now they pay around 5 rupees per kg).
We started with 2-3 farmers in Udumalpet. The following years were a learning process for us. We learned how to raise good chicks, manage farmers and define their responsibilities, ”Soundararajan recalls.
Farmers were happy with the business model, as it provided them with a secure income that complemented their unpredictable profits from agriculture.
In 1997, when some 40 farmers joined them and the turnover reached Rs 7 million, they became a limited liability company.
We felt that it was a sustainable model and that we could expand it. At that time we had about 25 people employed with us, ”says Soundararajan, who focused his attention on professionalizing the organization, creating separate divisions for HR, accounts, production and sales.
The company reached out to farmers in Tamil Nadu and soon spread its wings in 10 districts. Their chicken was marketed throughout the state and its turnover reached Rs 100 million in 2000.
It was time to look beyond Tamil Nadu and they expanded into the neighboring states of Andhra Pradesh and Karnataka. Chandrababu Naidu, who was then CM of Andhra Pradesh, supported their expansion in the state.
From then on, the growth was rapid and little by little they also expanded to other states. Currently, Suguna works in 9,000 villages, 18 states, with 23,000 farmers, who between them have a closed area of 10 million square meters and produce around 8 million chickens per week.
We have 250 branches throughout the country. Each branch has between 15 and 20 employees and all branches are connected via the Internet. We implemented enterprise resource management (ERM) in 2004, ”says Soundararajan.
The company provides day-old chicks to farmers. They also provide food, medical care and technical support to the farmers, who deliver the adult chicken every 40 days. On average, each farmer has around 6,000 birds, although some farmers in UP have only 500 birds.
Poultry needs the direct attention of farmers. We do not encourage non-farmers who may see poultry as a business opportunity, ”says Soundararajan. In that way, he admits, there is a social angle to his business. He shares how the lives of many of the farmers who have partnered with them have changed for the better.
“Now they will estimate some regular financial gain and now they shouldn't just believe in the financial gain from their farm, that is unpredictable. They send their sons to smart universities and have money to buy their daughters' weddings. this brings great satisfaction to the United States of America, ”he says.
Suguna Foods controls eighteen percent of the poultry market share in India. Through a network of 250 contemporary Suguna Daily stores in the province and Kerala, they also sell processed chicken, yet as Soundararajan observes, "Indian acceptance these days for live chicken is ninety-eight."
Suguna has established a poultry subsidiary in Bangladesh, but has no big plans for the export market. Currently its export is predominantly to the Middle East and accounts for Rs 80-100 million of its annual revenue.
“We cannot compete with the United States and Brazil, which are the market leaders. In Brazil, the cost of chicken production is low, because the price of poultry feed, corn and soybeans, is 20% lower there, ”he says.
