Hyderabad: Suguna Foods, a poultry business of 8,700 million, expects a 20 percent saving in its revenue due to the Covid outbreak. To bring about a faster turnaround in its business, the company rationalizes and restructures its operations by focusing on core markets and categories and moving out of non-core regions.
To create a distinction, the company plans to focus on processed chicken and added vitamin D-fortified eggs. Although the processed chicken segment is currently small, it will be a segment with growth prospects in the coming years, said Ravindhara Babu, marketing of Suguna Foods.
Talk about the Covid an impact on the sector and the current scenario, he said, “Poultry sector that suffered losses up to 20 000 million due to Covid nationwide outbreak is now on the road to recovery. The industry has 70 percent of the Covid supply and demand levels, and it can take another 2-3 months to reach normal levels. However, Suguna reached 80 percent levels, well above the industry average. ”
Several small poultry farmers experienced a liquidity problem and closed their business due to Covid. However, the government is looking at restructuring loans and extending moratorium to limit the risk. Both the central and state governments treated poultry as an essential commodity and it helped to recover faster. The sector is transitioning from a crisis phase to a revival.
Big companies like Suguna have plans to ease the liquidity restrictions. The company has already tapped on e-commerce platforms to meet demand and once the restaurant and hospitality sector across the country fully recovers, demand will be present in the coming months, he notes.
The company today operates in 20 Indian states and has expanded its footprint to South Asian and African markets. The company operates in Bangladesh and Kenya and would like to conquer more overseas markets.
Suguna has attracted investments from International Finance Corporation and Asian Development Bank to $ 69 million (more than $ 500 million). ‘We are restructuring our investments in critical growth areas where there is an opportunity to sharpen operations and price realization. We are investing in expanding feed mills, expanding breeding capacity and acquiring new farms. We are engaged in contract farming and today we work with 43,000 farms in India, and we also have our own breeder farms. As part of the restructuring, we are also leaving some markets in India due to productivity, performance and demand, ”he said.