How thinking out-of-the-shell helped SKM Egg launch innovative egg-based product

By: | Published: September 14, 2018 3:11 AM

SKM Egg Products Export (India) Ltd, based in Erode, Tamil Nadu, has recently introduced ‘egg white cubes’ in the domestic market. SKM Shree Shivkumar, the managing director of SKM Eggs, says this is the first such product in India.

SKM Egg launch, tamil nadu, USDA, European Union, International Egg Commission, TIDCOSKM Egg has won every conceivable export award in the country. It has set up subsidiaries in Japan, Russia and Europe, and its products go worldwide.

SKM Egg Products Export (India) Ltd, based in Erode, Tamil Nadu, has recently introduced ‘egg white cubes’ in the domestic market. SKM Shree Shivkumar, the managing director of SKM Eggs, says this is the first such product in India. The egg white cube, made from chicken egg white, has been developed in-house by the company and can be used in various dishes and is also ready-to-eat. A serving of 100-gm of egg white cube provides 14-gm of natural egg white protein. “It’s a zero-fat and no-cholesterol product,” says Shivkumar.
The company, which was set up in 1997, has one of the largest egg processing plants in Asia. It has the capacity to process 18 lakh eggs per day, to produce 7,500 tonnes of egg powder annually. It has received all quality certifications globally required for egg production, including halal and kosher certificates. Its quality management systems are in compliance with the United States Department of Agriculture (USDA) and European Union (EU) norms. It contributes to more than 50% of Indian exports and accounts for more than 10% of Japanese Imports, in its products (egg liquids, egg powder) category. More than 90% of the company’s income of Rs 250 crore comes from exports. It is now hoping to grow in the domestic market, too, with the launch of value-added products.

Shivkumar has been in the poultry industry for 25 years, starting in his teens. He is currently the president of the Indian Egg Processors Association and a member of the International Egg Commission. He is also a governing board member of the Indian Institute of Food Processing Technology.

Shivkumar has been working with his father SKM Maeilanandhan who had set up an animal feeds company. Maeilanandhan would sell the feed to farmers and, in return, purchase 15 lakh eggs every day at predetermined prices before selling them in the market. “We were making losses in egg trading. My father asked me to look after this business. I was able to cut down losses by better logistics management.”

Around the same time, the Tamil Nadu Industrial Development Corporation (TIDCO) was looking for a co-promoter for an egg processing unit, which would cater to exports. Since SKM was already trading in eggs, it seemed a good match. SKM Egg was set up in association with TIDCO, with an installed processing capacity of 10 lakh eggs per day. TIDCO’s shareholding was 11%, which has since come down to 7.58%. SKM Egg went into a 10-year marketing partnership with Belgium-based Belovo, which was also helping with technology.

The early days were disastrous. The company got into difficulties within a few months of its launch. There was global recession to deal with, and prices fell for processed eggs. To make matters worse, the presence of pesticide residue in its egg products led to rejection of the company’s finished products in the EU markets, the major market for egg yolk powder.

This forced the company to operate its sophisticated egg powder plant at 20-22% of the installed capacity between 1997 and 2000. “Although Indian labs cleared our products, we realised we had to be much more specific about the tests,” says Shivkumar. The company started putting in strict controls. “Farmers were paid a premium if they followed SKM Egg’s conditions. They had to stop using pesticides and antibiotics.”

After taking these measures, in 1999, Shivkumar decided to host with its partner Belovo a conference for potential distributors and customers. “I felt things would change if they saw our facility and quality controls at work,” he says. Many potential customers from 27 countries were invited and many of them slowly started placing orders. Capacity utilisation went up to 45% and the company could break even.

After financial restructuring to bring down debts, Shivkumar started working towards making SKM Egg one of the most modern facilities in the world. It is the only unit in the country with commercial layer compartmentalisation. Its poultry feed is 100% vegetarian. Every ingredient that goes in is tested for food safety. Filtered air, used in the process, is monitored daily for microbiological air quality. Sanitised processed water is regularly analysed for physiochemical and microbiological purity.

SKM Egg has won every conceivable export award in the country. It has set up subsidiaries in Japan, Russia and Europe, and its products go worldwide. The business still remains tough, challenging and unpredictable. “The European and American farmers are heavily subsidised and our price is no longer the cheapest, as it was when we started. We compete with the Europeans in egg whites and the Americans in egg yolk. We have to keep fighting. Some years are good and some are not. We have to be alert all the time,” adds Shivkumar.

He is convinced that it is in the B2C area where the growth is going to be good. The recently introduced egg white cubes are expected to be a game-changer in the country where there is high protein deficiency. “Egg is a complete protein, and 50-gm of complete protein per day is adequate for adult human beings. Our egg white cubes can be used in place of meat, poultry and fish,” says Shivkumar.
SKM Egg’s egg white cubes are simple boiled egg whites with a shelf life of 21 days. It is packed just like paneer in tetra packs and is available in Tamil Nadu and Karnataka. SKM Egg is planning to go pan-India in a phased manner. Currently, the company has a 5% market share in the domestic market. It hopes to reach 15% market share by 2021-22, and achieve a Rs 500 crore turnover. “Thinking out-of-the-shell was a mantra we adopted consciously to keep pushing ourselves to innovate,” adds Shivkumar.

sushila.ravindranath@expressindia.com

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