Agri Business

Srinivasa Hatcheries to diversify into dairying

K V Kurmanath Hyderabad | Updated on December 08, 2011

Srinivasa Hatcheries plans to diversify into dairy industry and goat rearing

Srinivasa Hatcheries, a BSE-listed company, will diversify into dairy industry and goat rearing in two phases.

The group will withdraw from restaurant and infrastructure businesses to focus on agriculture and allied sectors.

Initially, it would focus on breeding of high yielding animals for the dairy industry that registers very low productivity.

“We are good at breeding. Though our core activity has been poultry industry, we can bring to the table processes that can ensure production of good breed of animals. We have studied the market and found inefficiencies in the quality of animals,” Mr Suresh Rayudu Chitturi, Managing Director of Srinivasa Hatcheries Limited, told Business Line.

The venture would either be a fully-owned subsidiary or a joint venture with a firm that could bring in expertise in the industry. Productivity in the US is put at 10,000 litres per animal as against just 200 litres in India.

“Only a handful of companies are focussing on breeding quality animals. There is a severe shortage. We can improve productivity only through improving quality of animals, We will start the breeding programme with 600 animals by April 2012,” he said.

For the financial year 2010-11, the poultry firm posted revenues of Rs 143 crore with a net profit of Rs 19.54 crore.

Outlook

The company saw flat growth in revenues for 2011-12. “But we expect lesser profit this year. We foresee fall of prices from December 15. But the long-term outlook for the poultry industry is bright. Consumption of poultry products is estimated to grow by 280 per cent by 2020,” he said.

The biggest challenge for the industry is that companies are not able to manage the demand-supply equation.

After two phenomenal growth years, the industry is caught up with over supply.

This might lead to reduction in broiler chicken price.

The per capita consumption of chicken in India is put at 2.4 kg a year against 44 kg in countries such as Brazil.

Industry pegs the figure at 8 kg by 2020.

kurmanath@thehindu.co.in

Published on December 08, 2011

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