SOUTH AFRICA – Tiger Brands, the leading food manufacturer in South Africa, has announced the resignation of its CEO, Noel Doyle.
Doyle’s departure comes after a period marked by the economic fallout of the COVID-19 pandemic and the legal consequences of the 2017 listeriosis epidemic that resulted in over 200 deaths.
Additionally, Tiger Brands had to recall over 20 million cans in July 2021 due to packaging defects, incurring a pre-tax cost of US$38 million.
In September 2022, the company faced yet another recall, this time for baby powder products containing traces of asbestos.
Tiger Brands’ Board jointly decided that new leadership was needed to navigate these challenges, culminating in the end of Mr. Doyle’s tenure.
Tjaart Kruger, former CEO of Premier Foods, has been appointed as his successor, effective from November 1, 2023. Doyle will remain available to facilitate a smooth transition until March 31, 2024.
Kruger has more than 30 years of leadership experience in the South African fast-moving consumer goods sector, including previous roles at Tiger Brands. He signed a 26-month contract with the company, aiming to provide stability, accelerate strategy execution, and create value for shareholders.
The South African agri-food industry faces numerous challenges, including declining consumer purchasing power and inconsistent energy supply, largely due to Eskom’s operational issues.
To address these concerns, Tiger Brands announced a commitment of US$6.3 million to manage power cuts by the public electricity company.
Despite these difficulties, Tiger Brands reported a 16% increase in turnover, reaching US$1 billion for the first half of 2023, which ended on March 31. However, the operating income decreased by 9% to US$73 million) over the same period.
Meanwhile, Tiger Brands has cautioned that its operating income for the financial year ending on September 30 would be lower than the previous year due to ongoing challenges in fully recovering higher input costs.
The group’s cost reduction initiatives, which aimed to offset these costs, are expected to end ahead of the previously guided R460 million target.
The performance of Tiger Brands’ various business units varied, with positive results from beverages, home and personal care, Tiger Food Services Solutions, exports, and deciduous fruit.
However, poor performance was recorded in the rice, bakeries, groceries, and snacks and treats segments, the latter two experiencing volume declines.
Despite the lower operating income, group earnings were supported by better-than-expected growth in income from associates. Tiger Brands anticipates reporting a year-on-year decrease in earnings per share of 2% to 9% and a decrease in headline earnings per share of 2% to 5%.
The group’s full financial results are expected to be published on or about December 1, 2023.