As globalisation has developed over the past 20 years, it is interesting how different corners of the globe have become intrinsically linked. Take for example the case of the Kerry Group, a bastion of Irish food production. Whilst the Group is headquartered in Tralee, Ireland, much of its operations are spread across the world.
Kerry Ingredients & Flavours is the largest of all the Kerry Group divisions and is responsible for producing in excess of 15,000 ingredients, flavours and integrated solutions. The division operates over 125 manufacturing sites across the Americas, EMEA and Asia-Pacific.
Serving major sectors of the food and beverage industry in over 140 countries, the business has established itself as a leading supplier of ingredients and flavours to the world’s major food, beverage and foodservice companies.
Over a long period of time, the Kerry Group has undertaken a series of acquisitions and these, combined with organic growth, have seen the division flourish and become the largest and one of the most high-tech producers of technology-based ingredients, flavours and integrated systems.
Within Asia-Pacific, Kerry Group had made an acquisition of DCA in 1994 and 2 years later they acquired the remaining 50 per cent equity in the Solutech DCA joint venture. This was an important move as it gave the Group a manufacturing base and foothold close to Sydney, enhancing the company’s capabilities to supply its range of ingredients to the food industry in Australia and New Zealand.
By 1997, the Group, realising the growth potential of South East Asia, announced an agreement to acquire SDF Foods, a Malaysian-based food ingredients processing company. SDF had an interesting business model as it was able to take advantage of the country’s rich raw material resources which include palm oil and starch – in order to produce items that were predominately exported (as much as 90 per cent went to growth markets).
A year later further acquisitions saw Kerry Group take control of the Mauri and Pinnacle food ingredient concerns of Australian group Burns Philip and Co. Ltd. The purchase of the 2 businesses provided Kerry Ingredients & Flavours with 2 manufacturing facilities in Australia and New Zealand, further reinforcing the company’s footprint in the Asia-Pacific region.
The 2 acquisitions meant that Kerry Group now developed and produced a range of seasonings, flavours, coatings, sauces, marinades and proteins for Asia Pacific markets whilst at the same time inheriting a strong presence in the distribution of ingredients to bakery, foodservice and wholesale markets in Australia.
The new Millennium brought about a restructuring programme for the Group’s Australian operations in 2001, which included the commissioning of a $AUS 10 million expansion project at the company’s Murarrie (Brisbane) plant and a $AUS 10 million upgrade to a processing plant in Altona (Victoria). At the same time, the company developed a new regional head office and R&D facility in Sydney, at a further cost of $AUS 6.5 million.
Later that same year, the division opened a new technology-advanced factory in Johor Bahru, Malaysia, which has proved to be an important element in the Group’s expansion into China, Japan, Singapore and Indonesia.
Further acquisitions took place which included the 2002 purchasing of a seasoning and marinade manufacturing facility close to Bangkok and the acquisition of Ernsts Food Ingredients, also in Malaysia.
According to the Group, a further 12 acquisitions have taken place since 2005, which have given Kerry Ingredients & Flavours and manufacturing presence in China (the company’s first Chinese facility came as a result of the acquisition of Hangzhou Lanli Food Industry Company Ltd in 2005); Singapore; Indonesia and India.
Underlining the strategic importance of the Asia-Pacific region, in August 2013 it was reported that Kerry Group plans to strengthen its foothold in the Chinese market through its food technology capabilities.
Frank Hayes, Head of the Corporate Affairs Department, outlined the Group’s ambitions to AgriLand: “We have been in the Chinese market for 10 years. We have a very strong foothold here and we will continue to progressively introduce all the latest food technologies to the market.
“Our customer base is growing across Asia and China. Part of the journey ahead is to provide the same service and business in Asia as we do in Europe and the Americas. The challenge for the next number of years is to broaden the food technology into the Asian market. We have employed more resources in the past number of years, 13 per cent of our group business is now in Asia.”
That same month saw the Group announce its half-yearly results, which highlighted that in Asia, sales revenues on a reported basis were up by 15.4 per cent to £339.4 million, largely driven by strong demand from the foodservice sector.
Of course Kerry Group is very much a global entity and aside from its production of food ingredients, and flavours, it also produces consumer food products. The company’s product portfolio includes over 15,000 food and ingredient products.
In total, the company operates over 140 manufacturing facilities across 5 continents. Undoubtedly the company’s Asia-Pacific production interests are a lynch-pin to the ongoing success of the Group.