Fonterra searches for CEO replacement

Fonterra is in the process of shortlisting candidates to replace CEO Theo Spierings, who is set to leave the dairy cooperative later this year.

His exit comes after the cooperative was severely criticised for governance issues by some of its 10,500 farmer shareholders.

Fonterra’s first half recorded losses of NZD348m due to an NZD183m legal settlement and poor performance at its Chinese partner, Shenzhen-listed infant formula producer Beingmate.

In 2015 Fonterra paid NZD756m to acquire 18.8% interest in Beingmate, which was one of the top players in the Chinese infant formula business. However, its market share has since reduced by 70% in the last five years to 2.5%.

The Chinese partner faced losses for two consecutive years, compelling Fonterra to record a decrease in the value of its stake in Beingmate to NZD244m ($175m).

Fonterra stated that its board and Spierings had begun succession discussions last year.

It also initiated international searches for potential candidates in November 2017 and is now in the process of shortlisting candidates.

Fonterra chairman John Wilson said that the board is planning to bring the decision forward in order to make the announcement, possibly by April 2018.

Wilson said: “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.

“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 unitholders.”

Following the departure, Wilson hoped that Theo would play an advisory role and provide his expertise during the transition.