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Jan 8, 2009

Lorry Strike Hits Poultry Business

The ongoing truckers strike is threatening to take its toll on the poultry business in the State. Poultry companies are complaining of inability to transport feed to their chicken farms. We have stocks for about three days. If the strike continues, the chickens will starve, B Soundararajan, Managing Director of the Coimbatore- based Suguna Group told to The New Indian Express. An increase of Rs five on every kilogram of chicken meat is also likely.

The Rs 2,000 crore-Suguna has 1.3 crore broiler birds across the country with the feed plant located in Coimbatore. Already the recession has caused Suguna to cut down production by 20 per cent in the last few months. In the last five months, we had to cull about six to eight lakh birds from the parent stock. If the situation does not ease off by March, we will have to cut production further by another 15 to 20 per cent, said Soundararajan.


This would involve fresh culling of birds that would find their way to Sugunas retail outlets in Chennai and Coimbatore. We will also have to lay off about 800 employees if the scenario does not change by the end of FY09. Currently, Suguna has on its rolls about 4,000 employees and has put a freeze on fresh recruitments. Similarly, Shanthi Poultry Farms in Coimbatore has cut down production by about 15 per cent and culled about 50,000 of its 3.5 lakh birds from the parent stock.


Further, Suguna has slowed down its expansion plans of 20 new projects for feed mills, hatcheries and processing plants for chickens across the country. Compared to an investment of Rs 300 crore in 2008, we plan to invest only Rs 80 crore in 2009 on ongoing projects. The Group has already downsized its turnover target from about Rs 3,500 crore to Rs 2,800 crore in FY09. Meanwhile, after 17 years, the poultry industry witnessed a negative growth of 17 per cent during May- June 2008. Last fiscal, the industry grew by 15 per cent. Indications point to a further 20 per cent downslide in the coming months.

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