Fonterra’s board has presented a revised capital structure proposal, containing key changes sought by farmer shareholders.
On what’s next after the end of his seven-year reign at Fonterra, Spierings says his “what’s next will be a focus on a better world rather than a bigger job”.
Fonterra’s board is searching for his replacement, as announced last week during the co-op’s half-year result media conference in Auckland.
The co-op revealed a net loss of $348 million for half-year ending January 2018, having paid $183m compensation to rival Danone and taken $405m impairment on its Chinese joint venture with Beingmate.
Fonterra chairman John Wilson says Spierings’ departure is not linked to the Beingmate saga.
He says Spierings will continue to drive the co-op strategy in the coming months “with special emphasis on China”.
“The board and Theo are committed to a high-quality transition to a new chief executive and when we have more information on timing we will let our farmers and the wider market know,” says Wilson.
“Until then it is business as usual with the focus on driving returns to our farmers and unitholders.”
Spierings will work towards “a high quality handover”. He referred to his exit from Fonterra as “an awkward moment that doesn’t happen too often in life”.
But in big companies it is normal to look at succession plans, he says.
“When I came I said ‘I see Fonterra as the envy of the dairy world’; actually that’s what it is. We are the highest paying co-op in terms of cash payout in the world and I’m extremely proud of it.”
Spierings admits not everything has gone according to plan over the last seven years. The controversial Beingmate investment in China remains an issue.
Spierings says choosing Beingmate was the right decision in 2014, when it was China’s leading local infant nutrition brand; the founder and majority shareholder Xie Hong had been named entrepreneur of the year.
“Yes, that was the right decision but we have certainly learnt lessons since then.
“China evolves very quickly; to have an 18.8% stake in a publicly listed company in China with regulations increasing pretty quickly is not easy, to say it mildly.”
Spierings says Beingmate and its founder were also slow to embrace e-commerce. However, Fonterra is not looking for a new partner in the infant formula sector in China.
Theo's highs and lows
September 2011 – Theo Spierings joins Fonterra as its new chief executive.
August 2013 – False botulism scare involving whey protein
2015 – $8.40/kgMS milk payout is the highest in the co-op’s history.
2015 – Farmers reject Fonterra’s recommendation to limit use of palm kernel expeller (PKE) on farms; co-op criticised for lack of farmer consultation.
2017 – Fonterra ordered to pay $138 million compensation to Danone over false botulism scare.
2018 – Investment in Beingmate unravels; $404 million impairment leaves farmers fuming.