Suguna III

active

Established in 1984, the group of companies known as the Suguna Group consolidated under the holding company Suguna Holdings Private Limited (“SHPL” or the “Group” or “Suguna”), is now one of the leading poultry integrators in India with operations covering all areas of the poultry sector including broiler and layer farming, hatcheries, feed mills and processing plants. The Group has operations across 20 Indian states and one union territory, and also has an overseas presence in Sri Lanka, Bangladesh, and Kenya.        SHPL holds the following fully-owned subsidiaries: (a)   Suguna Foods Private Limited (“SFPL”) (India): is the Group’s flagship company and contributes to more than 90% of the Group’s revenues. It is a fully integrated poultry enterprise engaged in feed mills, broiler and contract farming, hatcheries and processing plants in India and is now also involved in value-added products for the retail market (mostly chilled meat). SFPL operates (a) 72 owned and leased hatcheries across India supporting over 35,000 farmers; (b) about 75 feed mills including India’s largest feed mill with a capacity of 2,000 MT per day in Karnataka; (c) grandparent (GP) and breeder farms, some in environmentally-controlled sheds (EC sheds); (d) contract broiler farms; (e) three processing plants; and, (f) a research and development division that continuously works towards improving the feed conversion and standardization of nutritional requirements of the birds. SFPL is continuously expanding and currently has operations in 20 states in India; (b)   Globion India Private Limited (India): is an animal healthcare company, primarily engaged in the manufacturing of vaccines for poultry and industries, both for captive consumption of the Group and external sales; The company also sells healthcare products of livestock and aquatic feeds. (c)   Suguna Dairy Products Private Limited (India): incorporated in 2016 as a spin-off of SFPL’s dairy business in India. It is engaged in the production and marketing of milk and curd. It leverages Suguna Foods’ network of farmers in and around Coimbatore, Tamil Nadu to procure milk directly from farmers and to test for quality, complying with India’s food safety regulations; (d)   Suguna Food and Feeds Bangladesh Pvt. Ltd. (“SFFBL”) (Bangladesh): entered Bangladesh in 2011, by setting up a leased feed mill. It then set up breeder operations and sells farmers a package of feed and day-old chicks. SFFBL now runs 2 leased feed mills, which are operating at full capacity.(e)   Aminovit Feeds Private Limited (Sri Lanka): started its operations in 2011, engaged in the production of poultry feed premix. It procures part of its raw materials from SFPL and exports its premix products back to SFPL and other feed production companies in India; and(f)    Suguna Poultry (Kenya) Limited (“SPKL”) (Kenya): established in 2016 to facilitate Suguna’s entry into the African market. It is currently a feed manufacturer but now aims to invest in both a breeding facility and an owned feed mill. The proposed investment (the “Project”) includes:  (a) An IFC A loan comprising of (i) a US$ A Loan of up to US$15 million and (ii) an INR denominated Non-Convertible Debentures (“NCDs”) of up to INR1,800 million (approximately US$25 million equivalent) to SFPL in India for the construction of poultry infrastructure, including potentially a hatchery, processing plant, poultry environment-controlled shed, premix plant and related poultry assets and incremental working capital financing to further expand its operations in northern and eastern India (primarily in Uttar Pradesh, Assam, Punjab) as well as in some parts of Western India; (b) IFC A loan of US$10 million to SFFBL for construction of feed mills, breeders, and hatcheries in Bangladesh; (c) IFC A loan of US$4 million SPKL in order to finance expansion of operations in Kenya. The above IFC financings total up to US$54 million equivalent. All facilities financed under the Project are together referred to as “project facilities” in the following sections. IFC has a past relationship with the Group where in 2006, IFC had invested equity in the Group and remained invested until 2014. Environmental and social performance of Suguna was satisfactory.