Kerry chief calls for change

IRELAND has a chance to restructure its dairy industry to make it more competitive on the world stage, according to Kerry Group chief executive Stan McCarthy.

Speaking at the Association of Chartered Certified Accountants (ACCA) Business Leaders’ Forum in Cork, Mr McCarthy said: “Dairying as it pertains to Ireland is very important, it is indigenous, we can produce milk efficiently, we have a dairying competency. But we have a structure within the island of Ireland which is not competitive with the rest of the world.

“We have a chance to get that corrected,” he said.

Mr McCarthy said it was “interesting” that while the Competition Authority is bringing a Supreme Court challenge against Kerry Group’s €140 million takeover of consumer foods group, Breeo, the authority did not seek to put a stay on the execution of the deal.

Mr McCarthy estimates it will take 30 to 36 months to come to the Supreme Court but emphasised that the integration of both businesses is currently taking place.

He said it is “likely” in the future Kerry Co-op’s 24% holding in Kerry Group will be reduced but stressed there are no immediate plans to do so.

“The shareholders of the co-op technically have to make up their mind if that’s what they want to do.

“Last year it was worth €1bn in investment, today it might be closer to €700m but it is a very valuable investment,” he said adding the firm will pay a dividend of close to €40m this year.

And he set a 10% margin target for the company’s global business. “We want to get our margins up to 10% from 8.7% of EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortisation),” he said.