Murray Goulburn boss resigns

The managing director of  Murray Goulburn Co-operative Co. Limited (MG), Gary Helou, has resigned, with the outgoing boss set to remain with the company for a short period to assist with the transition to an interim CEO while a search for a successor is undertaken.

The company’s CFO, Brad Hingle, has also resigned from his position following Mr Helou’s decision to step down as the managing director but will remain in the business to assist with the finalisation of the FY16 annual results. David Mallinson, currently executive general manager business operations, has been appointed as interim CEO.

Mr Mallinson joined MG three years ago and has held a number of leadership roles within the dairy industry, including commercial director for Fonterra Brands Limited, and chief financial officer Fonterra Australia and New Zealand.

Mr Mallinson had been leading MG’s business operations function which encompasses the breadth of MG’s supply chain, from farm to market, and employs 1700 of MG’s 2400 people.

Commenting on his appointment, Mr Mallinson said: “MG is a great business with a strong growth future. I firmly believe MG’s value add strategy is the right direction for the company and I look forward to working with the MG team to execute the strategy, with discipline and rigour in the weeks and months ahead.”

MG revises forecast, cuts milk prices
In an ASX trading update, MG announced it has reviewed the expected performance for the balance of FY16 after concluding that the previous outlook is no longer achievable as it was based on factors, such as exchange rates and the international performance of ready-to-consume dairy food product sales, which have not eventuated.

This will see a reduction in the actual milk price paid to suppliers for the balance of FY16. In a supplier briefing, MG expressed disappointment that the company could not generate the previously forecast milk prices for FY16. Aware that suppliers will be impacted by the lower milk prices, and in the face of difficult dairy farming conditions, MG also announced a Milk Supply Support Package (MSSP) to assist its suppliers.

The company’s strategy of shifting its product mix from commodity products to higher margin, value-added and ready to consume dairy foods remains in place, however, the company acknowledged that greater focus to support the execution of this transformation is required and it will be implementing a series of changes within the business to support the continued transformation. The company said it remains committed to continuing to focus on transforming MG into a first choice dairy foods company.

Board chairman, Philip Tracy, said: “I believe history will judge Gary [Helou] as a visionary leader who delivered a strategy that has transformed the industry. He has made a significant contribution to MG and has been a powerful driving force behind our transition to become a globally recognised, ASX-listed food business. We thank Gary for his passion, drive and leadership during what has been an important transformation period for MG.”

Mr Helou said: “During my time at MG, we have transformed the company’s capabilities and capacity and in the process delivered two consecutive years of premium milk prices for Australian farmers. While maintaining this price has proven to be difficult in current market conditions, I firmly believe MG has the foundations in place to support a strong and successful business in the years ahead.”

MG is Australia’s largest dairy foods company and one of Australia’s largest food and beverage companies with annual turnover of around $2.9 billion. Through its co-operative structure, MG has more than 2500 supplier shareholders.

MG manufactures and markets a full range of dairy and nutritional products such as cheese, milk powder, butter and fat, drinking milk and liquid milk products, nutritionals and value-added products, such as infant formula. MG supplies the grocery, foodservice and ingredients channels domestically and around the world, particularly in Asia, with its flagship Devondale, Liddells and Murray Goulburn Ingredients brands.

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