Suguna Buys Its Saudi JV
Suguna Poultry Farm has bought its Saudi joint venture (JV) partner's 50% stake in Supreme Suguna Foods. This comes at a time when the company is on a retail expansion drive to tap the growing demand in the domestic market. “Our focus is on the domestic market. The bird flu scare has been affecting exports,” said B Soundararajan, managing director, Suguna. The buyout would cost the Coimbatore-based Suguna Rs 25 crore. Supreme would be merged into Suguna Poultry and the company is funding the stake acquisition entirely out of internal accruals. “The merger process would be completed shortly,” Soundararajan said. Supreme Suguna, a 50:50 joint venture, was promoted as an export oriented unit in 2002 between Suguna and Saudi Arabia's Supreme Foods Company.The company's plant at Udumalpet is currently exporting about 400 tonnes of processed chicken a month to the Middle East. Despite the buyout the unit would continue exports, Soundararajan said. The company is planning to scale up capacity at the unit from the present 1,000 tonnes a month to 2,000 tonnes primarily to support ‘Suguna Farm Fresh', its nationwide retail venture. Currently, exports constitute only Rs 40 crore of Suguna's Rs 2,018-crore turnover (for fiscal 2008). With demand for broiler chicken increasing 17-18% per annum compared to about 13% in the past, the company believes that the local market offers ample scope for growth.
