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IFC picks up stake in Suguna Poultry for $11 m

Our Bureau

Looking at medium-sized high growth companies

Chennai , Oct. 12

International Finance Corporation (IFC), which signed an agreement to take $11 million stake in Suguna Poultry Farm Ltd, is looking at supporting such medium-sized companies with high growth potential, according to Mr Lars Thunell, Executive Vice-President, IFC.

At a press conference here, he said that IFC, the private sector arm of the World Bank, is looking at agribusiness as one of the focus areas for its funding support.

Infrastructure - a strategic priority for the governments is another focus area.

The deal with Suguna Poultry, Mr Thunell said, is a `typical type of deal' that IFC would be interested in with high growth companies that also helps farmers, enhances quality of food and improves corporate governance.

IFC has built up a $1.4-billion portfolio of investments, grants and credit funding in India. Last year (July-June) it brought in $400 million and in the current year it would be more than $500 million, he said.

Mr Iyad Malas, Director, South Asia, IFC, said that IFC took a 5 per cent stake in Suguna, the Coimbatore-based company through the $11-million deal. This was the second such deal in Coimbatore for IFC. The earlier one, a few months ago was in an auto components company. IFC is looking for more such opportunities to support medium-sized companies in smaller town and cities. That IFC has opened an office in Chennai itself is an indication of its focus in this area.

Mr B. Soundararajan, Managing Director, Suguna Poultry Farm Ltd, said that through the funding, the company looks to IFC's support in reaching the global markets, enhancing corporate governance within the company, which till now had been a family-owned concern.

Suguna Poultry Farm is a Rs 1,100-crore company, which aims to become a Rs 3,000-crore company by 2010. It deals with over 11,000 poultry farmers through a contract farming arrangement and hopes to bring in 12,000 more in the next three years.

IFC's international expertise would be crucial to Suguna's growth by supporting its investments in value added processing units, supply chain management as the company expands its breeder farms, hatchery and feed mill.

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