Global customer focus for Kerry

KERRY Group’s strategy of aligning itself with the needs of its key global customers looks set to deliver solid growth.

A new report says the “go-to-market” plan will deliver solid growth in the years ahead for the group, which was founded in Tralee in the early 1970s.

Shares in the company rose 2.56% yesterday to €20. Davy Research, which wrote the report following a visit to the group’s key R&D centre in Beloit, Wisconsin, in the US, said the centre represents an “amalgamation of four US R&D centres that provide the group’s customers with a one-stop-shop for ingredients of thousands of products.

Food analyst John O’Reilly said the centre will facilitate the group’s go-to-market strategy that will drive its next stage of development.

Shortly after taking over as boss of Kerry Group, Stan McCarthy made it clear the group’s future growth would hinge on Kerry utilising to the full the technologies it has developed to meet the growing needs of its broad customer base.

It was essential the group made full use of its impressive technologies built up over decades to ensure it could satisfy the increasingly exacting demands of its extensive multinational customer base, he said.

Mr O’Reilly said he expects the group to outperform the stock market in the year ahead and said Kerry has marshalled its technology in a way that underlines its commitment to the food industry.

Due to the global recession Kerry’s growth ambitions have been stymied while the boom years made acquisitions difficult to justify as private equity firms, hungry for acquisitors, paid high prices for key segments of the food industry as they pursued strong growth in their funds.

As a result, growth has slowed but the group has stayed solidly profitable.

However, Mr McCarthy’s projected turnover target of €10bn will take a few years longer to achieve than previously thought.

Kerry will now align itself with key customers, and the business will become more efficient, he said.

The group hopes to achieve sales of €4.8bn in the year to December 2009, he said.

Pre-tax profits this year will be €269m rising sharply to €356.9m next year as the global economy starts to pick up.