No business like dough business for Kerry Group's man in Asia

WILD GEESE: Mark McCormack, President and CEO of Kerry Asia Pacific

IT WAS doughnuts that first brought Mark McCormack to Asia. In 1996, four years into his graduate traineeship with Kerry Group, the Athlone man was dispatched to oversee the company’s first acquisition in the region. He’s been there every since.

“Kerry Group had bought the Doughnut Corporation of America, which was based in Australia,” says McCormack of his overseas posting. “It was really a food ingredients business making seasonings, coatings and snack flavourings. That was our first step into manufacturing in the region.”

For the 26-year-old, there followed the task of setting up the company’s regional office in Singapore in 1997 and the acquisition of a manufacturing plant in Malaysia in 1999.

Now some 15 years later, Kerry’s Asia Pacific operations are the star performer of the company’s balance sheet. With McCormack at the helm as president and chief executive, divisional revenues jumped 26 per cent to €509 million last year alone.

A former boarder at the Cistercian College in Roscrea, where alumni includes Brian Cowen and Dick Spring, McCormack went on to study business at Waterford RTC. When Kerry Group came knocking on its milk round in 1990, McCormack was hired.

On completing his accountancy exams with the company, he took a year off to travel around Australia and southeast Asia. Shortly after returning to the fold, however, he found himself back in Asia, this time without the backpack.

While Irish consumers will know the company’s Denny, Dairygold and Galtee brands, the Tralee-headquartered firm has also quietly built a global food ingredients business.

Of Kerry’s early ingredients acquisitions in Asia, McCormack says, “they probably weren’t star performers in their own right but we could see a strategic value in them”.

“We had been serving the region from the other side of the world, so getting closer to our customer was a very important step for us.”

Kerry’s customers in the region include McDonalds, Starbucks, KFC, Heinz, Nestlé, Kraft, Unilever and Kellogg’s – not bad for a company that has its origins in a cramped caravan in the muddy “Canon’s Field” outside Listowel.

Now manufacturing at 18 locations in 10 countries in the Asia Pacific region, McCormack attributes the company’s success in the region to “sticking to the knitting”.

“A lot of corporations I guess morph into something different along the way, but Kerry has been very resolute in sticking to what we are good at, which is food ingredients or food.”

Originally formed in 1972 to process and sell the milk of a handful of village creameries in Kerry and Limerick, the company is now a net buyer of milk.

“We would take some speciality proteins out of Ireland, particularly for our infant formula business where you are taking in the milk and fractionating it into highly refined proteins . . . but typically the skim milk powders we use in manufacturing would come from anywhere in the world, depending on the season.”

Living in Singapore for the past decade, travelling between the company’s manufacturing plants in Malaysia, Thailand, India, Indonesia, Philippines, China, Australia and New Zealand, McCormack has clocked up thousands of air miles in driving the company’s growth in the region.

“If you look at this part of the world, there’s rapid urbanisation, strong GDP growth, an emerging middle class and a strong growth in the quick-service restaurants,” he says.

“One of the huge areas for us is infant nutrition. In countries like China, people talk about the ‘little emperor syndrome’ where with a ‘one child’ policy, you have six adults channelling all their income and lot of their savings into this next generation.”

A greater adoption of western tastes is also propelling the company’s profits. “Traditionally, Asia has been a tea-consuming part of the world but now a coffee culture is growing here as well.”

Of doing business in Asia, he says outside of the multinationals, a lot of the large regional players are family owned and relationships are key. “Trust and integrity are important, your word counts for a lot.

“We try to avoid working through agents and third parties. It’s about friendships and understanding your customer. It takes them a while to tell you everything and to trust you because I suppose they have a fear of educating their competitors.”

For Irish companies thinking of going east, McCormack says tapping into Enterprise Ireland, Bord Bia and the consulates in the region is invaluable.

A member of the Irish Chamber of Commerce in Singapore, which has 300 members, he says the Irish chambers “are definitely something to tap into, particularly for a small business person. There’s definitely a great spirit amongst the Irish community of trying to help the people back home”.

Married to an Australian, with three young children, all born in Singapore, the 42-year-old enjoys being Kerry’s man in Asia.

“I was originally asked to move here for two years. I didn’t think I’d spend this long abroad but it’s a very dynamic part of the world. It’s great to be involved in a business that’s growing all the time. Your time is focused on growth rather than pruning, which is good.”

“I was originally asked to move here for two years. I didn’t think I’d spend this long abroad but it’s a very dynamic part of the world. It’s great to be involved in a business that’s growing all the time.