IFC signs Equity Investment Agreement with SPFL

Chennai, Oct 10 (UNI) The Washington-based International Finance Corporation (IFC), the private sector arm of the World Bank Group, today signed a US Dollar 11 million Equity Investment Agreement with the Coimbatore-based Suguna Poultry Farms Limited (SPFL).

Under the Agreement IFC would own five per cent of the shares of the SPFL, which was expected to grow into a Rs 3000 crore company by 2010 from the present turnover of Rs 1100 crore. The SPFL was expecting a turnover of Rs 1400 crore, at the end of current year.

The IFC's investment in SPFL would help the Indian company expand its breeder farms, hatchery and feed mill capacity as part of its growth strategy. IFC would also support the company in the area of supply chain management as the company seeks to source feed inputs directly from farmers.

Speaking to reporters after signing the agreement, IFC Executive Vice-President Lars Thunell said "IFC's investment in Suguna will support the company become internationally competitive and will benefit around 10,500 contract poultry farmers by creating economic opportunities for them." SPFL Managing Director B Soundararajan said "we see in IFC a long term investor and a partner who will enable us to implement our growth strategy and benchmark us against poultry companies in other countries." The company is pioneering an integrated poultry business model in India.

"IFC's investment in Suguna is the first in the poultry sector in India. It is in line with IFC's focus in India to enhance rural productivity. In addition, IFC will be guiding the company in establishing corporate governance best practices," Mr Iyad Malas, IFC South Asia Director, said.

To a question, Mr Thunell said the IFC's Indian portfolio stood at 1.4 billion USD, which included 400 million investment last year.

This year it was expected to grow to more than 500 million.

IFC would focus on other areas like private infrastructure projects for investment in India, especially in Port, road, power and airport sectors, besides Agri-business.

"The focus will be on medium sized companies having higher growth potential in other cities", he added.

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