PREMIUM CHICK FEEDS PVT. LTD. & PREMIUM HATCHERIES PVT. LTD.

Company Brief - An Integrated Broiler Production entity that links Breeding, Nutrition, Farming, Processing & Marketing of commercial poultry. - Achieved turnover growth of Rs 65cr (FY 2005/06) with expected closing of Rs 80cr (FY2006/07) - over a 15 year span - from humble beginnings of Rs 1.5cr (FY1990/91).

Company Turnover
3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 FY33 /33 FY00 /00 FY00 /00 FY00 /00 FY00 * /00 *Est. 3 3 3 3 3 3 3 3

Rs in Crores

Asset Profile
- Hi-tech Pelletised Feed Plant over 3.5-acres at Poynad (Raigad) with current run of 3,000 tonnes per month, plus two feed plants on term contract basis at Bhiwandi (Thane) and Talegaon (Pune). - State-of-the-art Hatchery project over 6-acres (75000 hatching eggs per week) at Poynad (Alibag) plus 3 hatcheries on term contract basis (2 lakh hatching eggs per week). - 30-acre Breeding Farm with 1 lakh sq.ft. space for 50,000 breeders plus 40,000 breeders on integration basis at United Hatcheries, Hyderabad.

Asset Profile
- 5-acre land holding at Sutarwadi, Roha (Raigad) with plans to create a poultry meat processing plant. - 500 Commercial Broiler Farms of capacities ranging from 1000 to 35,000 chicks spread over Konkan and Pune regions, enabling Mumbai market centric production and processing.

Human Capital
The Board of Directors, who are also the founding partners, consists of Senior Veterinarians and Poultry Traders, with focus on poultry health. Dr Girish Kolwankar (MVSc & AH) Poultry Expert Production, Technical, Quality Control Dr Shyam Dhawan (BVSc & AH) Poultry Expert Technical, Business Development, Administration Mr Arun Gulati (BCom) Agro Produce Stockist & Trader Finance, Purchase, Procurement DR Neil Dalgado (BSc& AH) Agro Component Stockist & Trader Projects, Maintainence Supported by 8 veterinary doctors, 25 managerial staff and 300 workers, working in different functions and levels.

Business Model

Integration Planning
BACKWARD INTEGRATION 1. Grandparent Import FORWARD INTEGRATION 10. Future Funding

2. Parent Population

9. Retail Store Plan

3. Hatchery Outlay

8. Brand Development

4. Feed Mill Expansion 5. BIRD FARMING

7. Product Development 6. PROCESSING PLANT

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1. GRANDPARENT IMPORT: Original breed grandparents can assure True Blood Line and reduce per chick price by Rs. 2. 2. PARENT POPULATION: Increased capacity of 2 lakh Broiler Breeder Parents, will enable upto 16 lakh chicks per month (Present Capacity - 9 lakh chicks / 80,000 parents). 3. HATCHERY OUTLAY: Increased Multi-location Incubation of 5 lakh hatching eggs per week, in sync with parent population capacity (Present capacity being 2.25 lakh chicks, through one owned and three contract establishments). 4. FEED MILL EXPANSION: Optimize usage of existing pelletised feed mill capacity to 6000 tonnes per month, from current run of 3500 tonnes, with expanded godown area.

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5. BIRD FARMING (END PRODUCT INPUT)

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Current Scenario
Reach

8 branches in 4 zones (Thane, Pune, Raigad, Ratnagiri/Goa)

Placement Upto 9 lakh chicks Integrated Farm Area 25 lakh sq ft

Proposed Scenario
Reach

10 branches in 6 zones* (Thane, Pune, Nasik, Raigad, Sindhudurg, Goa)

Placement Upto 16 lakh chicks Integrated Farm Area 40 lakh sq ft *Existing Markets to be further consolidated, with increased share in

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Forward Integration Insight (2008)

6. PROCESSING PLANT (END PRODUCT OUTPUT)

Current Scenario
Supply Size Supply Type Supply Sector

9 lakh birds per week Live Birds Wholesale Traders, Multi Location Shops. 16 lakh birds per week Processed Poultry Meat Self-owned Retail Outlets, Superstores, Hypermarkets, F&B Operators.

Proposed Scenario
Supply Size Supply Type Supply Sector

Proposed Infrastructure Fully automatic bird culling and poultry meat processing plant with a slaughter capacity of 50,000 birds per day.

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Forward Integration Insight (2008)

7. PRODUCT DEVELOPMENT: Developing finished product line of poultry meat, in sync with consumer demand. Invest in facilities like Food Processing, Packaging and Storage. 8. BRAND DEVELOPMENT: Create product recognition by branding and promoting its Ready-to-cook Dressed Chicken and Value Added (Table Meat) products. 9. RETAIL STORE MAP: Start a chain of 25 Retail Outlets and 15 Manned Vending Kiosks, distributed all over Mumbai. The same will be further branded as poultry meat locations. 10. FUTURE FUNDING: Once recognised by consumers, the company would scout for an MNC collaboration and raise IPO (Initial Public Offer) funds, for a multi-state footprint.

Business Opportunity
1. 2. 3. 4. 5. Established growth in consumption of animal protein due to change in food habits and increased affordability. Near possibility of ban to cull and dress live chicken in city limits, due to public health and hygiene concerns. Increased entry of processed food majors is expected due to boom in the organised retail sector. Value-added products (McDonald, KFC etc.) and food chains are entering the Indian F&B sector in a big way. Rising demand for dressed/processed poultry meat in the Middle East and Far East, which is presently catered by developing country suppliers like Thailand, Vietnam.

Business Deterrant
1. Markets are ruled by sentiment and guided by media hype like the Avian Flu case. There is no concentrated effort to combat that. The perishable nature of poultry makes it vulnerable to drastic price variations. Though good support is offered by field veterinarians, most of the semi-skilled manpower within poultry farms is trained hands-on. Medical and seasonal emergencies are best handled by integrators like Premium. Keeping aside minor exceptions, the industry is controlled by a deep-rooted trader lobby. The pricing gap between cost and sale is manipulated and direct contact between farmer and consumer is almost absent.

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PROPOSED DEVELOPMENT PLAN

No. 1 2 3 4 5 6 7 8 Particulars Grandparent Operation Parent Operation Hatchery Operation Feed Mill Operation Commercial Broiler Operation Processing Plant & ValueAdded Product Manufacture Retail Operations Branding & Marketing Total Fund Outlay Est. (in lakhs) 700 1660 630 75 610 330 700 500 5205