Fonterra’s outgoing chief executive Theo Spierings acknowledges that there have been hits and misses during his seven-year tenure in New Zealand’s top corporate job, but he remains confident he will be leaving the dairy co-operative in better shape than he found it.
Chairman John Wilson this week announced that Spierings would be moving on, just after the company announced a $348 million bottom-line loss for the six months to January, mostly arising from a $183m legal settlement with Danone and a $405m writedown from its investment in Chinese infant formula company Beingmate.
In a wide-ranging interview after Fonterra’s first-half result, Spierings said there had been hits and misses since he started at Fonterra in 2011.
He said he underestimated the complications arising from investing in a China-listed entity – Beingmate – and acknowledged that Fonterra had been slow to recognise the value in the alternative milk company a2 Milk – which is now New Zealand’s biggest listed company.
But there had been significant wins also, among them a return to profitability for Fonterra’s substantial European and US operations.
In Australia, which has long been a problem, there had been a big turnaround in profitability.
In Europe, thanks in part to partnerships with Dutch dairy company A-ware, there had been a quick turnaround.
“Europe is now a massively profitable business whereas at the time it was losing a lot of money,” Spierings said.
In South America – where Fonterra has a substantial presence – the co-op’s operations have been thoroughly restructured.
All up, he said the co-operative was “highly placed” compared with the competition in other parts of the world.
By: Jamie Gray
Source: NZ Herald