By David Hargreaves
Fonterra's ailing China associate Beingmate Baby & Child Food Co has appointed a new "independent" general manager in a move that Fonterra's hailing as an opportunity to reverse Beingmate's poor performance.
Beingmate announced over the weekend appointment as GM of Bao Xiufei (Bob). He joins Beingmate from Royal FrieslandCampina China, where most recently he was Friso Chief Sales Officer (CSO) and Consumer Dairy Managing Director. Prior to this, he was the Sales Director at Wyeth Nutrition and held senior roles at PepsiCo and Wahaha Food Group.
Fonterra Chief Executive Theo Spierings says the appointment signalled "an important step in the transformation of Beingmate".
“We know our farmers and unit holders expect a lift in in Beingmate’s performance, so influencing the right transformation steps through our 18% shareholding has been one of our top priorities.
"The appointment of a new and independent GM is the first of three key steps we communicated earlier this year in the Beingmate transformation plan.
Now this appointment is made, the next priorities will be for Mr Bao to unlock Beingmate’s distribution network and take the right actions to meet Chinese customers’ preferences for e-commerce.
“There are a number of opportunities to reverse Beingmate’s current performance and we look forward to working with Mr Bao and seeing Beingmate fulfil its potential.”
Hailed by Spierings as a "game changer" for Fonterra when the $756 million investment in the company was announced four years ago, Beingmate has become another full-blown Chinese horror story for the New Zealand dairy giant.
Beingmate made a loss this year of around NZ$208 million prompting Fonterra to belatedly take a write-down on the value of its investment, writing its holding down by $405 million, to a value of $244 million.
Fonterra has insisted that the rationale for investment in Beingmate remains sound, while many market observers believe it should and ultimately will have to, cut its losses and exit.
Spierings said on Monday that China was an important, strategic dairy market "and the Fonterra Greater China business continues to perform well overall, returning $3.4 billion in sales revenue last year".