Kerry plans expansion in emerging markets

By Lorraine Heller

- Last updated on GMT

Related tags Cent increase Revenue Income

Kerry Group’s strong interim performance has prompted the Irish ingredients and finished product firm to raise its earnings forecast, with more investment planned in emerging regions.

Sales revenue for the half year ended 30 June 2010 increased by 6.7 per cent to €2.4bn, while trading profit was up almost 13 per cent to €204m.

Revenue from the group’s Ingredients & Flavours division reached €1.8bn in the half year, compared to €1.7bn in 2009.

Kerry said that progress in this division was driven by successful product development initiatives, as well as a strong performance from its main global customers. These developments, said the firm, reversed destocking trends of 2009

“The Group continues to benefit from successful layering of our ingredients & flavours technologies – bringing industry leading integrated innovative solutions speedily and cost effectively to customers throughout global food and beverage end-use-markets,”​ said the firm in a statement.

Asia Pacific surge

Growth in Asia Pacific was particularly strong during the period, with revenue increasing by almost 23 per cent on last year to a total of €248m. This compares to revenues of €1.5bn in the EMEA region (4 per cent increase) and €701m in the Americas (7 per cent increase).

Kerry said its strong business development in Asia Pacific was “most encouraging”,​ prompting plans further expansion in Asia and other emerging markets, both through acquisitions and through existing activities.

Speaking at an earnings conference yesterday, Kerry CEO Stan McCarthy said "the whole concept of emerging markets lends to our technologies and certainly provides avenues for growth."

"It is quite possible that there will be a large number of acquisitions in the developing markets before the end of the year. A little bit early to say, but the question is consistent with the sentiment of our thinking and that we want to invest in those emerging markets."

Products the firm will be selling in these markets range from tapioca pearls for solid ‘bubbles’ in a tea product, to baby food ingredients.

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