That was when a new window of opportunity opened up for SKM. The Tamil Nadu Industrial Development Corporation (Tidco) sought a co-promoter for a venture thatwould export eggs in processed form. SKM applied, and was chosen. SKM Egg Products was set up in 1995 in technical collaboration with Belgium’s Belovo. Tidco took an 11% stake (currently 7.6%). The plant at Cholangapalayam was set up in 1997, with a breaking capacity of 1 million eggs a day, capable of processing 3,500 tonnes of egg powder a year. This has since been upgraded to 4,600 tonnes.

The egg-powder exports segment is indeed a niche. Three players—SKM, Venkateshwara Hatcheries and Ovobel—constitute a market worth about Rs 230 crore. Venkateshwara has a capacity similar to SKM’s; it can process about a million eggs every day.

The ease with which SKM Egg moved into the processing space couldn’t, however, be sustained when the business was up and running. Trouble hit almost immediately. The problem was pesticide residue. It was an issue that shook the whole Indian agri-products industry, and SKM took time to beat the negative perception about the country’s products. After over three years, things started looking good.

Shivkumar attributes the turnaround to a seminar that SKM conducted for potential suppliers and distributors from across the globe ("there were guests from 27 countries") in December 1999. "Seeing is believing," says Shivkumar, "and all of them could see our processes for themselves." In 2001, when SKM Egg broke even, all the high-interest debt had been done away with.

The breakthrough had come from Japanese customers. It didn’t take long for others to sign on. About 40% of the company’s Rs 100 crore revenues (for the year ended March 2008) came from Japan, another 40% came from Europe and the rest from other countries. SKM hasn’t tried the US market despite it being a big egg-powder user. That’s because, Shivkumar points out, the cost of hosting full-time US inspectors at its factory, as also incurring the duties, is not something SKM is keen on now.

At the other end of the business process are suppliers. They form the most important part of the SKM business. That’s because one of the parameters that the company prides itself on is quality. And, in an egg powder business, quality hinges mostly on the input supplier. SKM has tie-ups with farmers across 16 farms who, together, supply 1.1 million eggs daily. To ensure product quality, SKM has its own supervisors and veterinary professionals at the venues.

SKM is now tweaking the model a bit by investing in its own farm. The target is to produce 600,000 eggs daily. Simultaneously, the company will set up a feed mill and also increase its egg-powder processing capacity to 6,000 tonnes a year. All this would entail an investment of Rs 58 crore (the outlay for this year). About 1.5 million eggs a day would be needed to make those 6,000 tonnes of egg powder a year. That leaves 200,000 eggs in its bag. And that’s the starting point for SKM Egg’s debut in the domestic market.