Fonterra's No 2 man opts out

By KEVIN TAYLOR

Fonterra's second-ranked executive is leaving in a restructuring that brings one of the dairy giant's main subsidiaries back into the fold.

Chris Moller, managing director of NZMP, has resigned after turning down a new role as chief operating officer.

Other jobs will also go, although Fonterra said there would be fewer than 30 redundancies.

In August, Fonterra chairman John Roadley resigned in a surprise move, catapulting Putaruru farmer Henry van der Heyden into the top job.

Fonterra chief executive Craig Norgate said the move to make NZMP the heart of Fonterra's operation would reduce duplication and costs in areas such as human resources, strategy, finance, and mergers and acquisitions.

Norgate said it was logical that NZMP, the world's biggest dairy ingredients business, be at the centre of Fonterra's structure.

He said Moller was offered the chief operating officer position, where he would have remained in charge of NZMP.

But he had decided that his preference, after 15 years in senior roles in the industry, was to "move on".

Norgate said that in the co-operative's first year, it had operated as a small corporate centre with two strong business units, NZMP and New Zealand Milk, and a collection of other activities grouped under Fonterra Enterprises.

"This was appropriate in the first year and ensured we delivered the required performance.

"But it did mean some duplication.

"It's now time to deal with that duplication so we can reduce costs and, more importantly, become a single integrated team behind a common Fonterra vision."

Moller had "gone home" from his Wellington NZMP office yesterday.

Contacted on his cellphone, he said he had no comment but might once he had "considered the situation a bit further".

Former Dairy Board chief executive Warren Larsen said last night that Moller would be a loss to the industry. Fonterra could not afford to lose people of such calibre.

"He is well respected by the customers around the world, and well respected throughout the industry.

"It's a very, very sad day for New Zealand dairy farmers when someone of his ability leaves the organisation," Larsen said.

Moller came under fire in August after problems with the collection of milk from suppliers.

But Dairy Farmers of NZ chairman Kevin Wooding said dairy farmers would be relaxed about the changes.

"We are expecting a much better performance than last year, and they have to do that by lifting their game as far as productivity's concerned. Part of that is reducing costs."

Wooding said Moller's division did not perform well last year, but he doubted the milk tanker pick-up problems in August had anything to do with his departure.

Hard decisions had to be taken about the organisation, and dairy farmers were encouraged if Fonterra was making those types of decisions.

Wooding said many farmers had felt that splitting Fonterra's business units up would have made the organisation hard to control.

Federated Farmers vice-president Charlie Pedersen, a Fonterra Shareholders Council member, said dairy farmers would support the latest moves.

Norgate said Moller had made a significant contribution to the industry over the last 15 years.

Norgate would hold the chief operating officer position until a permanent appointment was made.

The appointment was likely to be made from within the company.

"We had hoped Chris would take the role."