How B Soundararajan Created a Rs 4800 Crore Poultry Business in India
In 1983, B.Soundararajan along with his brother set up a small poultry farm at Udumalpet (Tamil Nadu). Today, his company Suguna Foods Limited is India’s No. 1 broiler producer. His innovative contract-farming model has energized the livelihoods of farmers in rural India and helped them to grow along with the company.
In this entrepreneur interview, B.Soundararajan shares his entrepreneurial journey and explains how he runs India’s largest poultry business, which also ranks among the top ten poultry companies worldwide with annual turnover of Rs. 4800 crore.
With the poultry industry growing at a fast rate in India, and the emergence of malls and retail shops, demand for processed chicken and ready-to-eat poultry products has increased phenomenally. This provides an excellent opportunity for entrepreneurs to come up with innovative solutions for an industry where consumption has outgrown production.
Q: Tell us a bit about your background.
I am from Udumalpet, which is about 70 km away from Coimbatore. My parents used to teach in school but instead of pressurizing me to go for higher education and get a government job, they encouraged me to do something on my own. After finishing my school studies (till class 11), I decided to give up education and became an entrepreneur. In 1983, I started a poultry farm at Udumalpet along with my brother who studied till class 12.
Q: Why a poultry farm?
Because there were several farmers in the surrounding villages who were ready to trade eggs.
Q: Did you have any prior experience in this business?
No. I had to start from somewhere and I chose to trade eggs and poultry feed.
Q: You’ve come a long way from a trading company to a contract farming firm. Tell us how your business model works.
Our business model is called ‘contract-farming model’. We work with over 18,000 farmers across India and supply them with chick, feed and technical support. From there on, farmers become guardians of chicks and after they reach 37-40 days of growth, they are ‘lifted’ (similar to harvested) from farms and supplied to retail outlets for consumption. We provide appropriate remuneration to farmers for growing our chicks.
Q: From where do you get the final broiler and layer birds that is given to farmers?
We import the grandparent birds from Ross in UK, best known for their tenderness and taste, and from Lohmann in Germany, the best in layers and breed them in our own farms. From that we get the parent lines, and from the parent lines, we get the final broiler and layer birds. Our state-of-the-art hatcheries, quality feed and best farm management practices ensure the highest quality broiler and layer birds which are then given to farmers in the contract-farming model.
Q: How did you manage to fund your venture during your startup days?
In 1983, there were no VCs or other fancy options to raise capital. Moreover, because of our middle-class background, we did not have a large savings pool. So our mother gave us her gold jewellery which we sold for Rs 5,000. That was the initial capital that got Suguna Foods off the ground.
Q: In rural markets, gaining trust of farmers is difficult. How did you create trust?
We started our business with just three farmers. As our contract-farming model started to click, more farmers considered it to be a viable option. Moreover, in this case they did not have to depend on nature (for rain) and thus their earning capacity was entirely in their hands. Also, the time period for growth of chicks (40 days) was shorter than the time it takes to harvest any crop. This helped us to gain their confidence and create trust.
About Suguna Foods: Suguna Foods Limited is India’s No. 1 broiler producer. Energizing the livelihoods of farmers in rural India, they rank among the top ten poultry companies worldwide. Learn more about them at www.sugunapoultry.com