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Venkys India Goes International

by 5m Editor
22 September 2010, at 9:35am

INDIA - In an interview, the managing director of Venky's India explains the company's plans to spread beyond the country's borders.

The poultry segment in India is a very niche space and players like Venkys India seem to be doing well in the poultry product segment, reports Money Control. The company's recent expansion programme in this segment saw their estimated costs at 500 million rupees (INR).

The joint managing director of the company, B. Venkatesh Rao, told CNBC-TV18, they have plans to go global.

"In the next four days, we are launching in Dhaka, Bangladesh. It is all about poultry with a huge investment of INR100 crore (INR5 billion]," he said.

Below is a verbatim transcript of B Venkatesh Rao's interview with CNBC-TV18's Reema Tendulkar and Ekta Batra.

Q: You are a niche player and the kind of growth that you have seen is very remarkable. From a INR4 billion in financial year (FY) 2007, you stand at about INR7 billion in FY 2010. What's been the journey like and can we better this growth percentage?

A: I think the market in India is growing by 20 per cent and internationally also suddenly this year, we have taken a big jump in all South-East Asian and European countries. The main reason being two in one, internationally we have put up this year and nationally also we have expanded and overall poultry industry usually grows at 10 to 12 per cent but this year its grown 25 per cent.

The rates are stable, the farmers are getting good prices and the raw material basically the maize and soybeans for the feed ingredients is stable and overall the situation looks better. I think this will go on for next two year span.

Q: If you map your financial performance for the past four years, in FY 2010 it's the highest. You are operating in terms of an OPM (operating margin) at 13.5 per cent. Can we better that in FY 2011 and in the coming years?

A: I think it's difficult to comment it being a livestock industry but it should be the same as the scenario is the same.

Q: Could you tell us what growth trajectory we could expect from the international markets going forward? You are looking at expanding to Bangladesh and other markets. Could you highlight what the plans would be within the international foray?

A: Internationally, in the next four days, we are launching in Dhaka, Bangladesh. It is all about poultry with a huge investment of INR1 billion there and its basically poultry, feeds and vaccines. From there, we move on to Switzerland where we have put up a vaccine plant. The launch will take place next year so one by one things are coming up.

Q: Could you tell us about the animal health product and the oilseed divisions. How much do you think that's going to contribute in terms of revenues and a growth trajectory going forward for the company?

A: It's different for exports, it's different for the Indian market; I think 10 per cent because it is a tool which goes along with the vaccines, it's a tool for the poultry and it's hand in glove with chicken on the feed. I think it should be seven to 10 per cent of growth and revenue-wise, it will be very difficult to as ranges from product to product so it's a good jump we are going to have.