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The chicken and egg story

K. Jeshi
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B. Soundararajan, chairman, Suguna Poultry Farm Limited. –Photo: K. Ananthan
B. Soundararajan, chairman, Suguna Poultry Farm Limited. –Photo: K. Ananthan

Their business is worth Rs. 4,200 crore. And, hundreds of farmers are smiling. “Business runs independently. We just sit back and relax now,” he jokes as we settle down for a chat at his tastefully done-up residence. Recalling the beginning of his journey he says: “Every one knew about country chicken; the concept of broiler chicken was new.”

The farmer was dependant on 14 cost centres — from retail distributors, brokers and chicken feed suppliers to medicine suppliers and veterinary service providers.

But with ‘forward-backward integration', Soundarajan reduced the cost centres from 14 to three. Suguna now supplies day-old-chicks to the farmers along with feed and medicines. The farmers raise the chicks for 45 days and return them to Suguna. “We take the responsibility of marketing. The farmer becomes the producer with no investment or working capital. Bank loans are arranged to help them erect a shelter and maintain the poultry. Our hatcheries and breeding farms supply the chicks. We provide the feed (made from soya and maize), medicines and vaccines. This arrangement gives farmers a regular, assured income and a consistency never seen in agriculture, thus empowering them.”

From Sankaran Koil and Tenkasi to Rajapalayam, Madurai, Theni, Oddanchatram, Palani, Dindigul, Kudiyaatham, Vellore and Puducherry, you find a Suguna Poultry every 40 km or so. Their business model turned around the poultry industry. A farmer himself, Soundarajan says it has been an enriching journey. In 2000, the business scaled up to Rs. 100 crore and reached 4,000 farmers. The success story in Tamil Nadu prompted them to look beyond cultural and language barriers. The model is now replicated in 15 States. “A farmer is a farmer — he may live in Tamil Nadu, West Bengal, Punjab, U.P or Rajasthan, but his approach to life is the same. He needs a helping hand.”

In 2010, Suguna entered Bangladesh and Sri Lanka. It is now looking at South East Asia and Africa. A dedicated team of 5,500 employees is the company's backbone. The 250-odd offices across India are technology-enabled and connected to the central office in Coimbatore. Suguna Daily Fresh outlets (about 100 shops) promote a hygienic model of processed meat consumption. Soundarajan says more corporates should connect with farmers through a business plan that doesn't exploit them. “A farmer is confined to his land. To grow bigger, he needs help. The Government should protect his interests with a contract farming law. ”

The poultry industry, including eggs, stands at 40,000 crore and is growing at 15 per cent every year. Suguna commands 18 per cent of the market share, and expects growth from newer markets such as Bihar, Madhya Pradesh and Jharkhand. He is happy that from being a backyard farm, Poultry has become a corporate set up. “Chicken is no longer a festive special, people have it more often now. About 80 per cent of poultry produce comes through contract farming and this has ensured affordability, quality and availability. We are not technocrats or management graduates, but we worked on the business model and it clicked,” he says with pride.

Soundarajan is proud about Coimbatore. “People in the western part of Tamil Nadu are calm and ethical. I like this conservative approach. And we have such pleasant weather here,” he smiles. When he is not working, Soundarajan treks in the forests near Siruvani, Parambikulam and the Velliangiri Hills. Or blazes the track on his Kawasaki.

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