August 17, 2004

India's Godrej Agrovet Eyes 35-40% Growth In Poultry Business

Godrej Agrovet Ltd (GAVL) expects its integrated poultry business to grow by 35-40 per cent this year. The company plans to double its turnover from the ready-to-eat chicken brand, Real Good Chicken (RGC), every year for the next three years, according to GAVL MD, CK Vaidya.

RGC's market share at present in cities is eight per cent. Mr Vaidya added that the category is still commodity-driven, with live chicken accounting for 90 per cent of the market.

In the animal feeds business, which accounts for 80 per cent of GAVL's turnover, the company expects 10 per cent growth per annum. Turnover of GAVL, including its subsidiary Goldmohur Foods and Feeds, in 2003-04 was around Rs 800 crore. Agricultural inputs and oil palm account for 10 per cent of this, while IPB accounts for 10 per cent. In domestic animal feeds sector, both the organized and unorganized segments are about five million mt. Mr Vaidya said that the organised sector is around three million mt, of which GAVL's market share is around 27 per cent.

The company is focussing on increasing RGC's share in its existing markets like Mumbai, Pune, Bangalore, Chennai and Hyderabad. It views high product quality and hygienic production practices as its key strengths. Mr Vaidya sees a challenge in educating consumers about RGC's benefits vis-a-vis the commodity. In this direction, GAVL has recently started a mass media awareness campaign.

RGC is priced on par with the commodity when converted to meat cost. But a brand cannot change prices daily. Mr Vaidya added that its consumers belong to SEC A, B and people who consume chicken at least twice a week, look for value convenience and prefer packaged food.