The impact of the coronavirus outbreak in China is being felt by Irish food giant Kerry Group in its Chinese businesses, group CEO Edmond Scanlon confirmed this week.
Speaking at the group’s 2019 financial statement launch in Dublin on Tuesday, February 18, Scanlon noted the outbreak, and its consequences on the Asian country at present, have been taken into account of Kerry Group’s first quarter accounts for 2020.
Addressing journalists at the press briefing, the CEO said: “We have 1,100 employees in China in five manufacturing facilities and in a technology and innovation centre.
“First and foremost our priority is the health and safety of those employees and we’re doing everything we can to ensure that those 1,100 people and their families are safe; and I’m glad to say that they are.
Our plants right now are back working but are probably running at about 30% capacity or 30% capability.
“We expect that to improve over the coming weeks and months but we did put an adjustment into our guidance.”
Expanding on how the virus is impacting business, Scanlon said: “In terms of what’s driving that adversity at the moment, it’s actually consumer demand.
“From a supply chain perspective, the vast majority of what we’re manufacturing in China is sourced in China and is sold within China.
“We don’t have a big exposure from what we can see right now from a supply chain standpoint; its just consumer demand – the demand is just not there. We’ll keep an eye on that over the next few weeks and months.”
On a broader forecast for 2020, Scanlon said it is too early to comment in terms of whether the coronavirus will impact more on the year, saying: “Where we are right now is we don’t see any impact. One or two exceptions are very small on demand outside of China.
“It’s too early to comment on anything else beyond that.”
When asked how long it will take to resume operations to full capacity, the CEO said: “In terms of…capacity, the limiting factor at the moment is people in our facilities.
“I would say we have people that are coming back from Chinese new year that are from different provinces and they have to go through different protocols when they arrive into the particular province that our facilities are located in.
There’s just some I would say restrictions around movement of people still in China and we’re just working our way through that.
“As we stand here today I would say over the coming weeks, but I can’t be any more specific than that,” Scanlon concluded.