Canadian steps into the big league at Fonterra

By LIAM DANN primary industries editor

When Canadian Andrew Ferrier takes the top job at Fonterra in September, it will be the biggest step of his 13-year career.

In revenue terms, the jump up from the company he runs now is more than $13.5 billion. And not just any $13.5 billion - it represents the livelihoods of 12,600 Fonterra farmers and a significant chunk of New Zealand's annual income.

Ferrier handed in his notice at the Canadian consumer goods business GSW three days ago. The publicly listed company sells vinyl rainwater systems and water heaters and has revenue of just $500 million.

That doesn't sound too impressive, but the bulk of Ferrier's career was spent in the sugar industry.

Starting on the trading room floor in 1983, he worked his way to the top job in the North American division of Tate & Lyle, the world's biggest sugar company. At the top of his game he managed two of the major sugar brands in North America and was involved in heavyweight trade negotiations with the US Government.

He eventually left Tate & Lyle after a strategic disagreement with the British parent company about growth potential in the US. Ferrier was pushing for expansion.

Canada's is one of the few deregulated sugar industries in the world. The US is heavily regulated.

He says that parallel with New Zealand's position in the dairy industry is one of the dynamics that gives him the experience for this job.

Fonterra chairman Henry van der Heyden agrees. The company has completed the start-up phase and must focus on the world stage, he says.

"Our farmers will live, die or prosper depending on what happens on the global market, and he has experience in that global market."

Van der Heyden points out that Ferrier is a modest man who tends to undersell himself. GSW may be small but it experienced a dramatic turnaround under Ferrier's management, he says.

During his three years in charge, it made record profits. In the past two years the share price has risen from C$8.50 to C$23.

Farmers will be looking for that kind of performance when he turns his skills to them. Just 10 days after he takes over, Ferrier will have to face farmers at Fonterra's annual general meeting.

Outgoing chief executive Craig Norgate once said that every one of his shareholders was a Bruce Sheppard, the feisty Shareholders Association chairman.

Ferrier is under no illusions about how important winning them over will be.

"I look forward to meeting them. I'm aware there is a fair amount of politics."

He is optimistic that after two years of conflict surrounding the birth of Fonterra, farmers are starting to understand the potential value of its size.

"There will be a fair amount of disagreement in direction. My role is to try to break down the disagreement and articulate very clearly to all the stakeholders where we're going with Fonterra."

The bottom line would always be financial performance, he said.

"Farmers will give him a fair go," said Dairy Farmers Association chairman Kevin Wooding. What farmers wanted was some stability in the industry and improvement in their payouts. As long as they got that, they would not be too worried about the personalities at the top.

Wooding said he was relaxed about the appointment.

Curriculum vitae


Name: Andrew Ferrier.

Age: 44.

Married, with three children aged 13, 10 and 9.

Experience

2000-2003 President and chief executive of GSW, a Canadian manufacturer and seller of vinyl railing, rain gutters and water heaters. Acquired American Water Heater Company last year from Southcorp, almost doubling sales at GSW to C$414 million.

1998-1999 President and chief executive of Tate & Lyle North American Sugars, Toronto and New York. At the time it was North America's second-largest and most diverse sugar

processing company, with plants in Canada, the US and Mexico.

1994-1998 President of Redpath Industries, Toronto - a Tate & Lyle subsidiary.

1990-1994 Vice-president at Lantic Sugar, Montreal, the market leader in Canada.

1985-1990 Vice-president of Refined Sugars, New York.

1983-85 Financial planning/foreign exchange and sugar trading at Redpath Sugars, Montreal.

Education

1983 Master of Business Administration, Concordia University, Quebec.

1980 Bachelor of Business Administration, University of New Brunswick.