Fonterra CEO To Step Down As Dairy Co-op Sees Profits Tumble
New Zealand dairy cooperative Fonterra has announced that its CEO, Theo Spierings, is stepping down from his position later this year.
The announcement came on the same day that the dairy firm reported losses of $348 million in its interim results.
Although overall sales revenue rose by 6%, to $9.8 billion (mainly due to improved global dairy prices), Fonterra was faced with a $183 million payment to Danone after a 2013 contamination scare, as well as financial impairments from the group's investment in Chinese milk-powder brand Beingmate.
"We knew, going into this year, we would have to carefully manage low starting inventory levels," said Spierings. "This was followed by reduced New Zealand milk collections due to difficult weather conditions, further impacting our volumes available for sale. On top of this, we also had to navigate higher input costs, which squeezed our margins."
Spierings, who has led Fonterra for seven years, says that it is now "time for a new CEO who can lead the cooperative through its next phase".
The dairy firm commented that Spierings and the board had formally commenced succession discussions last year, with the international search for potential candidates starting in November.
Fonterra chairman John Wilson added that the board was expecting to make the announcement in April, but brought it forward to avoid speculation.
"It is not yet clear exactly when any appointment for Theo’s replacement will be made, but it is absolutely clear that Theo will continue in the meantime to drive the cooperative’s strategy and business, with special emphasis on China," said Wilson.
"The board and Theo are committed to a high-quality transition to a new CEO, and when we have more information in regards to timing, we will let our farmers and the wider market know. Until then, it is business as usual, with the focus on driving returns to our farmers and unit holders," he added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.