The CEO of Kerry Group said that the company has taken “a number of significant steps” in the suspension of its operations in Russia.
Edmond Scanlon was addressing the company’s Annual General Meeting (AGM) which took place in the Brandon Hotel in Tralee, Co. Kerry today (Thursday, April 28).
“We continue to be horrified by the tragic events that are unfolding in front of us and our hearts go out to the Ukrainian people in what is a truly devastating humanitarian crisis,” he said.
Scanlon said that the company’s primary focus was to look after its 132 Ukrainian employees and their families.
“Having initially taken the decision to scale back our operations in Russia, we then took the decision to suspend our operations there.
“Since that decision our focus has been to ensure that that suspension is managed in a very orderly and controlled fashion to ensure that we continue to fulfil our legal obligations and the safety of all our employees.
“We have taken a number of significant steps already in that suspension process. We’ve shut down one of our manufacturing lines and we will continue to work through this process over the near future,” Scanlon said.
The Kerry CEO said that a further update on the suspension of its Russian operations would be given in the company’s half-year results.
The board committed to examine a request from a shareholder at the meeting that the company make “a fairly substantial” financial or food donation to support the work of the Red Cross in Ukraine.
Consumers
Edmond Scanlon also said that the market place is “very dynamic” but there is currently strong demand in all markets that Kerry Group operates in.
He remains confident that the company can manage through the current inflationary environment.
However, Scanlon warned that a time will come when demand will be impacted by the high prices facing consumers.
The Kerry CEO noted that consumers now put more value on food compared to ten years ago.
“When we were facing the last recession, it was a race to the bottom on quality. It was a race to the bottom on cost. It was all about what is the cheapest price of everything because consumers weren’t prepared to pay.
“Our sense of it is that consumers will allocate a higher percentage of their income to food going forward and won’t compromise to the same extent as maybe they did in the last recession,” he stated.
Scanlon said that food security is now at a much higher governmental level than it every has been. “That’s a good thing,” he commented.
Kerry Group results
Edmond Scanlon told shareholders that he was “very pleased” with the company’s financial performance in the first quarter of the year. Group reported revenue increased by 8.1% in the period while group volume grew by 5.6%.
He pointed to the resilience of the performance against a highly volatile market backdrop including inflation and supply chain challenges.
As previously reported by Agriland, the company recorded group revenue of €7.4 billion for 2021, reflecting a volume growth of 8%. This gave a trading profit of €876 million.
The company made five strategic acquisitions last year and a further two in the first quarter of 2022.
Kerry brought forward its target date from 2025 to this year for 100% renewable energy use across its sites.
In 2021, the company reported a 39% absolute carbon emissions reduction compared to its base year of 2017.
It also reported reaching 1.1 billion people with sustainable nutrition solutions; the company has set a target of 2 billion people by the end of the decade.