KEY POINTS:
He might be Canadian but his use of rugby cliches is a good indication that Fonterra chief Andrew Ferrier hasn't had too much trouble settling into New Zealand life in the past four years.
Years of playing the game in Canada and the US also helps.
"Some of
my success in business is driven by playing a lot of team sports and recognising the importance of individual brilliance but the over-riding importance of teamwork involved in that," he says.
"In rugby if you're a superstar and you break away and you get tackled and there's nobody in support you lose the ball."
Ferrier has an All Black captain-like passion for side-stepping suggestions that he should take credit for Fonterra's golden run.
Last year revenue grew by $881 million to $13.9 billion and this year farmers are due a record $6.40, up from $4.46, per kg of milk solids.
World economic growth, strong demand for dairy products and tight supply have supported a boom in commodity prices and rising pay-outs.
The importance of teamwork is often not properly understood and like any company culture it starts at the top, he says.
Many chief executives running a $14 billion multinational company would have an oversized leather chair behind a mahogany desk in a well-appointed office.
Not Ferrier. It's not his style and nor is it appropriate considering the dairy giant's farmer owners, he says.
Apart from an impressive painting by New Zealand artist Peter McIntyre, Ferrier's office is functional, tidy and no different to thousands of others around the country.
"I wanted an office that's not substantially different than anybody else's," he says. "Secondly, when we moved in here I wanted an office that wasn't on the top floor, that I had people that report to me who are [situated] above me and people who report to me who are below me."
Ferrier's aim is to be accessible and just another part of the team.
"Right across the board I'm satisfied that we've got good people, they're good leaders, they're great team-mates and they all have integrity," he says.
Ferrier took up his role as Fonterra chief executive in 2003. But his first trip here was on his big OE in 1981, during which he connected with the Kiwi approach to life.
"I found the lifestyle of people very compelling, I found people significantly less materialistic than they were in Canada and the US. I found people very outdoorsy," he says.
Today he runs one of the most outdoorsy companies on the planet.
Coming from outside the New Zealand dairy industry - he has worked for the world's biggest sugar company, Tate & Lyle - did not hinder him in stepping into the top role.
"I think in many cases it was probably easier than harder because in any merger you have people that come from the legacy organisations; they have different ways of doing things. Sometimes they dig their heels in because this is the only way.
"So coming in with no agenda at all was probably the best thing that could have happened."
However, Ferrier found the culture change needed at Fonterra to be quite a journey.
The company had to be reprogrammed from a focus on supply and pushing products out of New Zealand to being focussed on meeting demand.
"It was a huge shift," he says. And it didn't come cheap.
Driving through the change in mindset took a couple of years, a couple of hundred million dollars and changed the way Fonterra did business in the rest of the world.
"We broke down stand-alone offices globally and turned them into one single virtual global office where the customer service centre was here in Auckland, running 24/7 in eight or nine different languages. We can run the globe as one seamless market," he says.
"Now we're starting to merge supply chains and really find opportunities to not only become a more significant supplier but also to drive more value in the products and services we're offering and all that is because we are more of a global player."
The only thing he would change is getting it done faster.
"It's been hard. It's been full-on ... but incredibly satisfying at the same time."
The world never stops turning and the potentially next big change is upon Fonterra - capital structure review.
The company has set November 15 as the date for telling farmers which options have been considered and the preferred choice.
The review is designed to protect against a redemption risk of farmers selling up, position the company for opportunities in the global dairy market and give farmers more investment choice.
None of the areas are of concern today but the review is aimed at future-proofing the business.
Speculation has been mounting that there will be some form of market float, although the company is keeping tight-lipped until it has spoken to farmers. However, capital restructure is not the only speculation that is swirling around Fonterra.
It was recently tipped to be one of a number of companies, including National Foods and Nestle, preparing for a takeover tilt at Dairy Farmers before the Australian company completes a market listing planned for next year.
Fonterra had been prepared to pay nearly $2 billion for National Foods in 2005 before eventually being out-gunned by San Miguel.
The company was looking at possible acquisitions in many parts of the world, Ferrier said.
"We have always thought it desirable to grow our market position in Australia to get it equivalent to what it is in New Zealand. But having said that there's two qualifications - one, in order to do it we have to acquire a company [and] the companies that are around are all privately owned. Number two, it has to be on financial terms that are attractive or we won't do it."
Ferrier was comfortable to have walked away from the National Foods bid but would still consider buying that company if it came back onto the market at the right price.
Meanwhile, last season's payout to farmers of $4.46 per kg of milk solids has been eclipsed by a record forecast of $6.40 for this year.
World dairy commodity prices have more than doubled but will soften one day, Ferrier says.
"Where prices are today is unlikely to be sustainable and the reason I say that is because there will be an impact on demand," he says. "There's going to be a level that we settle down at which will be probably below where we are now but quite a bit above historical levels."
However, the current levels of return are encouraging more farmers to convert their properties to dairying.
"In places like Southland they're going as fast as they can build milk sheds, basically," Ferrier says.
With world demand for dairy products growing at just under 3 per cent a year, Fonterra will take all the milk it can get, although conversions have to be both economically and environmentally sustainable, he says.
To put global demand growth in perspective, 3 per cent a year is equivalent to the entire production of New Zealand, Ferrier says.
"I see the potential of strong demand out there. So I see increasing opportunities for us to globalise."
Ferrier did not envisage being chief executive of a major global company when studying for his Master of Business Administration in Quebec.
He was fortunate when he joined Tate & Lyle subsidiary Redpath Industries in Toronto, where he experienced international trading from day one.
"I was thrown in the deep a lot, given huge responsibilities to see whether I'd sink or swim and I just found that I was invigorated by that."
New Zealand has become a more cosmopolitan place since Ferrier's first visit back in 1981, he says.
"I've often heard people use the term the last bus-stop on the planet - [the] planet's too small to have a last bus-stop now."
Ferrier and his family take a trip back to Canada every year and are still open-minded about how long they'll live in New Zealand.
"The family's well settled here and we're enjoying life, so there's no pressing desire to have a change," he says. Music to the ears of the board.
Andrew Ferrier
* Fonterra chief executive
* Age: 48.
* Family: Married with three children.
* Career: 2003-present: Chief executive Fonterra.
* 2000-2003: President and chief executive of GSW, a Canadian manufacturer of rain gutters and water heaters.
* 1998-1999: President and chief executive of Tate & Lyle North American Sugars, Toronto and New York.
* 1994-1998: President of Redpath Industries, Toronto, a Tate & Lyle subsidiary.
* 1990-1994: Vice-president at Lantic Sugar, Montreal, the market leader in Canada.
* Education: 1983: Master of Business Administration, Concordia University, Quebec.
* 1980: Bachelor of Business Administration, University of New Brunswick.
