SOUTH AFRICA – Tiger Brands says it has made “good progress” in its search for a new CEO after former head Peter Matlare gave notice late last year amid fallout from the group’s failed multibillion-rand Nigerian investment.
The food producer “envisaged” the appointment would be made by the end of March, it said in a stock exchange announcement on Monday. This reiterates earlier statements by the group.
Mr Matlare had remained CEO until the end of December.
“In the meantime, as announced previously, (chief operating officer) Noel Doyle has commenced duties as acting CEO,” the group said.
In September, Tiger Brands said Mr Matlare had reached agreement with the board over “his decision” to resign.
In mid-December, it said it would divest its 65.7% majority stake in Tiger Branded Consumer Goods to Dangote Industries — previously called Dangote Flour Mills — for a nominal $1.
The group had bought a majority stake in Dangote Flour Mills for R1.6bn in 2012 from Nigerian tycoon Aliko Dangote, but has since written down R2.7bn in the subsidiary.
Plunging oil prices, a much devalued naira currency and militant Islamist group Boko Haram have all been blamed for the failure of the company’s main Nigerian venture.
Mr Matlare said earlier the collapse of global oil prices had pushed up the price of flour imports into Nigeria, while a shortage of vehicle fuels had also caused national gridlock.
Meanwhile, Boko Haram disrupted exports to neighbouring Niger severely.
But Ian Cruickshanks, chief economist at the South African Institute of Race Relations, has questioned the due diligence process in relation to the company’s Nigerian venture.
Mr Doyle had said before Christmas that Tiger Brands still had two relatively small interests in Nigeria — the Deli Foods biscuit business and its 49% stake in snack, beverage and dairy manufacturer UAC Foods.
He also said the divestment of Tiger Branded Consumer Goods was “certainly” not an exit from Nigeria. Rather, this was an exit from “a significantly underperforming company that operated in quite commoditised and arbitrated categories”.
But the huge impairments in Nigeria put a heavy damper on solid gains from the core South African operations in the year to September, with headline earnings per share creeping up 1%.
With a further R250m impairment in Deli Foods and various smaller impairments, overall impairments were R1.9bn in the period.