Goodman Fielder board exits
Goodman Fielder’s new owners are aiming to turn the struggling consumer foods giant into one of the leading food companies in Asia after completing a drawn-out $1.3 billion takeover offer.
Goodman Fielder’s new chairman, Robin Nicholson, has flagged plans to leverage the extensive distribution footprints of Singapore-based edible oils company Wilmar International and Hong-Kong based investment company First Pacific in China, Indonesia, the Philippines and south east Asia to export Goodman Fielder’s market-leading brands.
Wilmar is Asia’s largest agribusiness group, with interests in edible oils, sugar milling and refining, grain processing and consumer foods, while First Pacific owns 50 per cent of Indonesia’s largest food company, Indofood.
The first brand to start selling in Asian supermarkets and convenience stores will be Goodman’s Meadow Fresh UHT milk, which is made in New Zealand. Other brands such as Meadow Lea margarine, Praise mayonnaise and White Wings flour are likely to follow.
“We’re very positive about this opportunity to expand Goodman Fielder from the premier Australian/New Zealand food company to one of the leading Asian food companies – that’s our objective,” said Mr Nicholson, an executive director of First Pacific.
“We want to integrate Goodman Fielder into our own operations and take advantage through the combined entity of the scale and the resources, and the distribution power that we have across Asia,” he said.
Wilmar and First Pacific are also investigating opportunities to bring some of Indofoods’ brands, including packaged cake mixes, to Australia. “If there are suitable products people here would like we’d look to bring them in,” he said.
Goodman’s entire board, including chief executive Chris Delaney, resigned on Tuesday after Wilmar and First Pacific completed the acquisition, almost 12 months after making their offer.
Mr Delaney, who had been chief executive since 2011 and was keen to stay on to complete an ambitious turnaround plan, has been replaced by Scott Weitemeyer, the chief executive of Wilmar’s Sugar Australian business.
“Scott will work with the dedicated team at Goodman Fielder to begin building a leading Asia-Pacific consumer foods business,” Mr Nicholson said.
Goodman’s chairman, Steven Gregg, has been replaced by Mr Nicholson, while Wilmar’s chairman and chief executive, Kuok Khoon Hong, and First Pacific non-executive director Graham Pickles, have been appointed to the Goodman board.
Mr Nicholson said Wilmar and First Pacific had no qualms about increasing their investment in Australia at a time when supplier margins are coming under unprecedented pressure as Woolworths, Coles and discounter Aldi battle for market share by cutting shelf prices and offering deeper promotional discounts.
Earlier this year Goodman, which has suffered a 50 per cent drop in baking profits over the past few years, agreed to slash the price of its leading bread brands and move to an every-day-low-price model at Coles and Woolworths.
“We recognise that is the challenge,” Mr Nicholson said. “But by putting the customer at the centre of our activities, we can deliver quality food products at the right price, which will benefit the supermarket chains, Goodman Fielder and the consumer.”
Wilmar and First Pacific have had preliminary contact with Woolworths and Coles, who have been involved in pilot programs for a new fresh bread distribution model.
“We want to develop long-term relationships with these key customers,” Mr Nicholson said. “They are our key allies and we need to emphasise that.”
Wilmar and First Pacific paid 67.5¢ a share for Goodman Fielder through a scheme of arrangement, valuing the maker of Wonder White bread and Meadow Lea margarine, at $1.3 billion. Shareholders will receive payment for their shares on Tuesday.
Mr Nicholson thanked Mr Delaney for his substantial contribution to Goodman Fielder, particularly his leadership of the company during a period of significant transformation and including the implementation of the scheme of arrangement.
Wilmar and First Pacific had no plans to merge Goodman and Sugar Australia – although Mr Weitemeyer will continue to be involved with the sugar business – and ruled out major cost cutting.
“There’s been significant rationalisation over the last few years,” he said. “It’s not a big component in how we see things going forward.”
Extracted in full from The Land.