Fonterra expands management team in emerging market push

Tuesday 8th May 2012

Fonterra Cooperative Group, the world's biggest dairy exporter, has expanded its top management team as part of the new strategy to focus on sales in emerging markets.

New chief executive Theo Spierings has appointed 11 of the 12 roles as part of a new group strategy, all with internal candidates. The flatter management structure will have a greater regional focus and come into effect from Aug. 1, the start of a new financial year.

Fonterra management has previously operated under large silos headed up by handful of executives, and the dairy exporter wants to reduce the complexity and potential for duplication under the existing model.

"The new structure and senior appointments reflect our focus on dairy nutrition and emerging markets, as well as our intention to reduce layers and duplication to drive efficiencies across the business," Spierings said in a statement.

"These changes, along with reconfiguration of existing business units and the support functions within the company, will position us to increase volumes and value with our strategy."

Spierings announced the so-called group strategy refresh at the first-half result in March, which included more than 100 projects. At the time, he singled out several strategies, such as a strong push into rapidly growing emerging markets where Fonterra has a strong presence such as China, Association of South Eastern Nations and Latin America, optimising New Zealand milk supply, building integrated milk pools, growing volumes of consumer branded and out-of-home nutrition products and tapping advanced nutrition needs of babies and ageing populations.

The top management, who all report to Spierings, is made up of: - chief financial officer Jonathan Mason, - managing director group optimisation and supply chain Ian Palliser, - group general manager strategy Maury Leyland, - group GM mergers and acquisitions Paul Campbell, - MD cooperative affairs Todd Muller, - MD New Zealand milk Gary Romano, - MD Australia New Zealand John Doumani, - MD ASEAN/Middle East/North Africa Mark Wilson, - MD China/India Kelvin Wickham, - MD Latin America Alex Turnbull and - MD Fonterra nutrition Sarah Kennedy.

The position for MD people culture and services is still to be confirmed. The new managers have until Aug. 1 to appoint the next two layers of management as the dairy exporter prepares for its new structure.

The new-look management structure comes as Fonterra looks to shore up its capital base in a bid to fund its global aspirations with the Trading Among Farmers project – a scheme that would enable farmers to sell the dividend rights of their shares into a fund, which would then be available for investors to purchase as units in a secondary market.

The dairy exporter has already unveiled plans to invest in a new Indonesian plant as part of its growth plans in Asia, and flagged a $100 million spend-up on building two new farms in China as it looks to produce 1 billion litres of milk in the world’s most populous nation by 2020.

BusinessDesk.co.nz

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