DEAR SIR: There is a lot of concern around a joint venture between Kerry Co-op and Kerry Group. Most people can’t understand the need for it or what benefit it will be. If the co-op board and Kerry Group management are split, will any joint venture between them ever work? Will the rowing just continue in the new business and drag it down?
There is certainly a joint venture model that can work for everyone.
It should have a low level of borrowing starting out, a milk pool with strong brands and a link to Kerry Group’s research and development centres.
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There should be a fair way out for dry shareholders in Kerry Co-op and a clear path for dairy farmers to buy into the joint venture knowing they can get their money out if they stop milking. A management and board will be needed that are dedicated to getting the best out of the new business for the benefit of milk suppliers.
If the business is strong starting out and is not burdened by high debt levels or the need to pay large dividends to shareholders, it can pay a good price for milk.
The joint venture needs to be set up properly on day one and managed properly every day thereafter.
The next few months are critical for Kerry suppliers and Kerry Co-op shareholders.
No one wants to be forced into something they don’t understand or don’t think will work or forced out of something that worked well for them in the past. The sooner Kerry Co-op directors and Kerry Group management unite, the better.
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DEAR SIR: There is a lot of concern around a joint venture between Kerry Co-op and Kerry Group. Most people can’t understand the need for it or what benefit it will be. If the co-op board and Kerry Group management are split, will any joint venture between them ever work? Will the rowing just continue in the new business and drag it down?
There is certainly a joint venture model that can work for everyone.
It should have a low level of borrowing starting out, a milk pool with strong brands and a link to Kerry Group’s research and development centres.
There should be a fair way out for dry shareholders in Kerry Co-op and a clear path for dairy farmers to buy into the joint venture knowing they can get their money out if they stop milking. A management and board will be needed that are dedicated to getting the best out of the new business for the benefit of milk suppliers.
If the business is strong starting out and is not burdened by high debt levels or the need to pay large dividends to shareholders, it can pay a good price for milk.
The joint venture needs to be set up properly on day one and managed properly every day thereafter.
The next few months are critical for Kerry suppliers and Kerry Co-op shareholders.
No one wants to be forced into something they don’t understand or don’t think will work or forced out of something that worked well for them in the past. The sooner Kerry Co-op directors and Kerry Group management unite, the better.
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