Kerry Group is looking at several small acquisitions in Australia and the United States and also wants to expand its food ingredients business in South-East Asia, its chief executive has stated.
After the group's annual general meeting at Tralee yesterday, Mr Denis Brosnan repeated that Kerry would prefer to make large acquisitions and could spend up to £1 billion if the right acquisition became available.
Already this year, Kerry has bought Tukania, a German food ingredients business, with sales of £15 million (€19 million) and which has the majority of the seasoning market in Germany. This acquisition also gives Kerry the opportunity to expand its ingredients business further into Eastern Europe, Mr Brosnan said.
But expanding further in SouthEast Asia is a priority for Kerry, which already has a manufacturing plant in Malaysia. "We need a bigger presence in South-East Asia and more manufacturing capacity," he said, adding that distances in the region make it more likely that this extra capacity will be obtained through acquisitions rather than building green-field operations.
Mr Brosnan also gave a strong indication that the group was unlikely to play an active role in any rationalisation of the dairy industry in Munster.
"It's a nice thing to aspire to, but I'm not sure if Kerry farmers would aspire to it," he said, adding that Kerry farmers who owned Kerry Co-Op and a sizeable chunk of the plc, did not want to take any action that would affect the share price. "If we did something that eroded the share price, we'd want to be out of Farranfore the day before," he said, adding that Kerry shares trade on twice the price earnings rating of Irish dairy companies such as Golden Vale and Glanbia.
A 200-strong attendance at the meeting heard criticism from one shareholder at the charges that Kerry's broker, Davy, levies for dealings in Kerry's shares. "Their commissions are very high," he said. And Davy director, Mr Brian Davy, who attended the meeting, said: "I think our charges are fairly normal.
Mr Brosnan was asked if Kerry could possibly become an acquisitions target. He said: "There's a 37 per cent block of shares held by the co-op who would have a say on that." He added that any offer for Kerry would have to be at a level "we would think unimaginable".
