Top Fonterra executive poached by Synlait
Leon Clement, formerly Fonterra Cooperative Group's managing director of Fonterra Brands New Zealand, has been hired as Synlait Milk's new chief executive starting in mid-August.
Synlait co-founder and CEO John Penno announced last year he would step down after 12 years leading the Dunsandel-based milk processor, whose shares have almost tripled since listing in July 2013. Penno will continue in a governance role from August, and said he is also looking at start-ups and young companies to work with once he steps down.
The company said it conducted a global recruitment search and Clement was chosen because of his experience in the branded dairy sector and leading major businesses internationally, specifically in Vietnam and Sri Lanka.
Clement was Fonterra's managing director in Sri Lanka from November 2012 to July 2015, and managing director for Sri Lanka & the Indian subcontinent for six months after that before moving to lead the New Zealand brands operation in February 2016, according to his LinkedIn. Fonterra last month confirmed Clement had resigned from his senior role in the company, where he had worked since 2002.
"He brings a broad range of skills and experience that is relevant to Synlait’s future strategic initiatives," said Synlait chair Graeme Milne. "The board of directors is pleased to have attracted a high-calibre candidate. With a reputable senior leadership team in place and an organisation of great people, we’re confident the incoming CEO has the skills and capabilities to lead Synlait to an even better future off the platform that has been created thus far."
Clement said he was excited to join Synlait at a pivotal time, and the business would "continue to target sustainable growth by leveraging the potential within our organisation, as well as the potential in the markets and customers we partner with."
Synlait has grown from a start-up in the early 2000s to a company with a market value of $1.4 billion today and customers including high-flying milk marketer a2 Milk. It was initially rebuffed in its attempts to go public by local investors and instead turned to China's Bright Dairy for equity capital to fund its growth. Bright Dairy now owns 39 percent of the company.
The company has said it expects to spend $125 million on an advanced liquid dairy packaging facility at Dunsandel and $260 million on a new nutritional powder manufacturing facility at Pokeno as it aims to keep up with growing demand for infant formula product.
In March, Synlait posted a record first-half net profit of $40.7 million on increases in the manufacture and sales of high-margin products and its relationship with a2 Milk. It invested $34.5 million in capital expenditure in the six month period, with $11.2 million on its Auckland blending and canning facility and $18.4 million on a new wetmix kitchen in Dunsandel.
When those results were released, Penno said canned infant formula volumes sold had tripled from the same period the year before, and Synlait had renegotiated supply agreements with New Hope Nutritionals and with Bright Dairy for four-fold volume growth over a five-year period, though that won't impact sales until the 2019 financial year.
The company's shares recently traded at $11.10, down 2.2 percent today but up 56 percent this year.
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