NEW ZEALAND – New Zealand milk processor Synlait has appointed dairy industry veteran Grant Watson as its new CEO as it seeks to steer itself back to profitability.
Watson will be joining the business in January 2022, succeeding John Penno, who will then be appointed as chairman when Graeme Milne retires next year.
He will be joined by Robert Stowell, who has been appointed chief financial officer after acting in the role for the last five months.
Watson has worked in the dairy industry since 2010, including in his most recent role as Miraka’s CEO. Prior to that, he held several senior roles at Fonterra.
At Fonterra, he led the significant growth of group’s global foodservice business and also oversaw the successful commercialisation of numerous value-added dairy products.
Milne said: “Grant has a track record of materially transforming and accelerating businesses by setting clear strategies, surrounding himself with diverse and talented people, and relentlessly driving execution to deliver strong sustainable results”.
Milne added that Watson’s success in transforming dairy businesses will be crucial in Synlait’s strategy going forward and the company looked forward to benefiting from his skills and experience.
Watson will be taking charge of a company desperately in need of something akin to a caffeine injection to steer it back to profitability.
In its recently published financial results, the company recorded reported a NZ$28.5 million (US$20m) loss for the ending July, driven by a sharp drop in infant formula sales.
The net loss – the higher end of the company’s published guidance – compares with a net profit of NZ$75.2m (US$52m) in the previous year.
The company’s depressed performance was mainly driven by the poor performance of its infant formula business which saw sales plummet 35 percent to 34,362 tonnes. This more than offset the 29 percent gain in the ingredient side of the business.
Synlait said it expects its Net Profit After Tax result to return to profitability in FY22 based on a return to normal trading conditions and tighter management of its Ingredient business.
The company also expects improved infant base powder volumes; growing contribution of its Liquids and Consumer Foods business units; and targeted and significant cost savings from Synlait, Dairyworks and Talbot Forest Cheese to boost the company’s bottom line.
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