McCormick & Company (NYSE:MKC) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Strategy For India
Alexia Howard – Sanford Bernstein Research: I’m sure others will ask about the quick service situation, but I’d like to ask about India. You built up your sales in China through acquisitions and organic growth pretty rapidly over the last few years. So I’d like to hear a little bit more about the strategy and the priority level for India. Could you give us a little bit of information about what percentage of sales are currently in India? How important this new restaurant chain customer might be and might there been other opportunities like that? Might we see further acquisitions in India and just a little sense of the priority level as India versus China at this point?
Alan D. Wilson – Chairman, President and CEO: Sure. India is much more of a developing market for us than China is and we’ve been in China for more than 20 years and we’re in China with both our consumer and our industrial business and so we’ve had time to build that out. India, right now, we have mainly a consumer business along with a couple of joint ventures that are more ingredient-based. Our strategy is really similar, because the industrial business helps provide the scale for us to continue to grow and expand our consumer business. Although in this case we have an established consumer business that will allow us the scale to start to build out an industrial business. India is still pretty small percentage of sales, less than 5% and we are very bullish on the market, although, we recognize that it’s going to be a long run, long-term growth strategy for us. Remember, as we stated when we made the Kohinoor acquisition, our strategy there is to evolve to much more value-added portfolio and we’ve started to do that by introducing the Rice ‘n Spice mixes and some of the 2 Minute Meals, so what we want to do is, put our value-added products through the distribution channel that we acquired when we bought Kohinoor.
Organic Growth Rate Outlook
Thilo Wrede – Jefferies & Company: I would have thought that these organic growth rate in the consumer business in EMEA might accelerate with the – now that you have integrated Kamis and you can rollout the products into new regions and I think you alluded to it in the slides that Russia is actually a great growth driver for you right now. Yet, the organic growth rate doesn’t seem to budge too much, was I too optimistic or are there really too many offsetting factor? What’s the outlook here that this can better?