Fonterra Cooperative Group says it welcomes the appointment of Bao Xiufei as general manager of Beingmate Baby & Child Food.
“We know our farmers and unit holders expect a lift in Beingmate’s performance, so influencing the right transformation steps through our 18 percent 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," Fonterra chief executive Theo Spierings said in a statement.
Fonterra owns 18.8 percent of Beingmate which it bought in 2015 for about $755 million as part of its plan to break into China’s second- and third-tier cities, where the Kiwi company had limited exposure. The investment hasn’t panned out as expected, with Beingmate reporting losses and Fonterra wrote down the stake by $405 million in the first half of the current financial year, calling its performance “unacceptable”.
Spierings said the next priorities will be for the new general manager 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,” said Spierings.
According to Fonterra, he joins Beingmate from Royal FrieslandCampina China, where he most recently held the position of Friso chief sales officer 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 Shareholders Fund units rose 0.2 percent to $5.45, having dropped 15.1 percent so far this year.