The chief executive of Kerry Group hinted today (25 August) that the Ireland-based food maker is eyeing an entry into India as the business aims to expand in Asia.


Kerry, which makes a range of consumer foods as well as ingredients for industrial customers, has a fledgling business in Asia but CEO Stan McCarthy said he wants the group to expand further in the continent.


“There seems to have been some movement in the last month or two in the offerings that are out there with regards to acquisition potential. I would like to expand in Asia and it’s very important for the overall business strategy to do so,” McCarthy said.


“I would like to see us open up new geographies. We have to look at India very seriously. I would certainly see no slowdown in the deal activity within Kerry. We have spent EUR240m so far this year. I can see us doing some more deals this year – but nothing huge.”


During the first half of 2009, Kerry has bought Irish consumer foods business Breeo, UK pasty business G. Adams, Costa Rican flavours firm Prima and Belgian savoury group Dera.


Despite that outlay, McCarthy said Kerry’s balance sheet is strong enough to make further “bolt-on” acquisitions this year and revealed the company was looking at bolstering its ingredients businesses.


“We will have a focus on acquisitions that will complement our technologies. We’re very optimistic about our beverage systems and flavours and that’s something that we want to continue to build on,” McCarthy said. “If I were to pick two that are more likely, it probably would be in those categories. But there are some other things we are looking at very closely as well in functional ingredients.”


Kerry’s March acquisition of Breeo gave the company a business including brands like Dairygold and Galtee. McCarthy said Kerry would look at meat and dairy brands that would “complement” its existing business but the group’s current focus is on absorbing the Breeo acquisition.


“We’re in the midst of integrating Breeo and we want to make sure we complete that; that’s the target we gave ourselves at the beginning of the year.”


Earlier today, Kerry posted rising half-year profits on the back of better margins from its ingredients, flavours and consumer foods divisions.


Nevertheless, the weakness of sterling has weighed on Kerry’s consumer foods business, which includes snack brand Cheesestrings and Wall‘s sausages. Like-for-like trading profit from its consumer business was flat, while it saw 4.5% growth from its ingredients business.


CFO Brian Mehigan said the weak pound was “probably the biggest issue” to have affected Kerry’s consumer foods businesses that export from Ireland to the UK.


The fall in sterling had taken “25% straight off the bottom line”, Mehigan said. “It is an extreme hit to a business, particularly when you’re competing in a particular market with competitors that don’t have the same issue.”


He added: “To achieve a flat like-for-like performance in consumer foods, taking into account the impact of sterling and to have taken such quick action to remedy the underlying profitability of the business, has been quite satisfactory.”