The chief executive of Kerry Group, Edmond Scanlon has said that the company has “strong ambitions” to grow its dairy business division “for the foreseeable future”.
He was responding to a question from a shareholder at the global taste and nutrition company’s Annual General Meeting (AGM) in the Brandon Hotel, Tralee, Co. Kerry today (Thursday, April 27).
In recent years Kerry Group has placed all of the assets of its dairy business into a standalone entity, called ‘Dairy Ireland’, which is led by Pat Murphy.
The dairy business includes milk processing facilities in Listowel, Co. Kerry and Newmarket and Charleville in Co. Cork.
“There is no change in terms of what we think about that business,” Scanlon told shareholders.
“That business continues to perform well in the context of the environment and in the context of inflation, and everything else that’s going on.
“We will continue to invest in that business like we have in the past, selectively around areas where we feel we it can grow,” he said.
“The performance of that business continues to be strong in light of all the challenges out there. There is volatility in that business, as everybody in this room knows. But I think the business has been managed in light of that volatility.
“So we continue to manage that business as tightly as we can. We have a very strong customer base there that is committed to that business and continues to engage with the team there.
“We have strong ambitions to continue to grow that business for the foreseeable future,” Scanlon added.
In April 2021, talks between Kerry Co-op and Kerry Group on a potential dairy business deal were suspended after over 18 months of discussions and have not resumed.
Kerry Co-op is the largest shareholder in Kerry Group with an 11.4% stake in the company worth around €2 billion.
This morning, Kerry Group reported a 10.3% increase in revenues in the first three months of 2023 driven by increased pricing of 8.3%.
The overall growth was led by the dairy, snacks and pharma markets, as customers continued to navigate the heightened inflationary environment.
The company said the Taste and Nutrition element of the business delivered “solid overall volume growth” despite the effect of increased pricing.
There was a volume reduction for the company’s Dairy Ireland division of 5.8% and increased pricing of 14.4%, reflecting the challenging global dairy market conditions.
“Despite the uncertainty that we are seeing in the market, we do remain remain confident that we are well positioned from an overall perspective to achieve our growth ambitions,” Scanlon told the AGM.
“There continues to be a very strong innovation pipeline right across our business, both geographically and from a technology standpoint.
“We believe we will still continue to manage the inflationary environment. We’ve a well established model in terms of managing that inflation and we expect that to continue.
“We will continue to invest capital to evolve our portfolio and also to build for growth into the future.
“For the full year 2023, we expect adjusted adjusted earnings per share the growth of 1-5% on a constant currency basis,” the Kerry Group chief executive said.