15 Aug 2018

New Fonterra chairman says no doubt of strategy change

4:17 pm on 15 August 2018

The new chairman of Fonterra, John Monaghan, is in no doubt it may have to change its strategy.

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Fonterra's new chairman is clear on the plan for changes to be made. Photo: rnz

"We have been very clear that parts of the company's performance has not been where we would like it," he told RNZ's Midday Report.

"It is normal best practice that we do a review of our assets, the performance of those assets and the returns we are receiving."

Today, it announced a new interim chief executive to replace Theo Spiering.

New Zealand's largest company has been buffeted by a wave of criticism about not disclosing the illness of the former chairman, John Wilson, as well as it financial performance.

On Monday, the dairy processor and exporter dropped its forecast payout.

Mr Monaghan, who only took over last month as chairman of the Fonterra Board, acknowledged there had been "head winds".

Asked if there could be changes in strategy, Mr Monaghan said: "We have been in discussion with our farmers for two or three months. We have been in a very big listening mode.

"What we do know is that the Co-op which has served us so well for 18 years, needs to adapt to set us up for the next five, 10 or 15 and that is what we are doing."

Earlier in the day, Fonterra had issued a statement saying: "It's important that we give ourselves the time to take stock of where we are as a co-operative, breathe some fresh air into the business, then determine any changes that are needed."

New chief executive Miles Hurrell, who has been with the company since 2000, is currently Fonterra's chief operating officer of its farm source unit, which is responsible for working directly with its roughly 10,500 farmer-owners.

He replaces Theo Spiering, who will stay on until the beginning of September to help with the transition of leadership.

Mr Monaghan said Fonterra needed a new leader to hit the ground running quickly.

He said the new chief executive would be paid "substantially less" than Mr Spierings who was paid a total package of $8.32 million in 2017, though he would not be drawn on a figure.


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