Mercury chief executive Fraser Whineray. Photo / NZ Herald.
Farmers and the share market gave an initial thumbs up to the appointment of Fraser Whineray to the newly-created role of chief operating officer at Fonterra.
Whineray is currently chief executive of Mercury, where he draws a salary of just under $2 million, and has held several senior leadership roles since joining the company in 2008.
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Fonterra chief executive Miles Hurrell said Whineray was a "results-orientated" business leader.
"Fraser has demonstrated he can transform organisations to achieve growth in complex environments through a focus on innovation, customers and his team," Hurrell said in a statement.
"He is motivated to contribute to New Zealand's export success and to drive sustainability, innovation and efficiency in business – three strengths that we believe can create real value."
The appointment comes as long-suffering Fonterra shareholders and suppliers contemplate a share price that has rallied by almost a dollar since hitting a record low of $3.15 in late August.
Fonterra last month reported a net loss of $605m for the July year - its biggest on record - and the second year in a row of red ink.
Andrew Hoggard, Federated Farmers vice president and a Fonterra suppler and shareholder said it looked like a positive appointment "but time will tell".
"He seems to have a lot of good, positive vibes about him," Hoggard said.
Harbour Asset Management portfolio manager Shane Solly said Whineray had good pedigree as an executive.
"At Mercury he has managed well and he has experience in the dairy industry," Solly said.
"He does add a bit of grunt to the front row at Fonterra," he said.
Solly said the co-op's move towards becoming a simpler business had been well-received by the market.
"But there is more work to be done."
Whineray is the brother of NZ Super Fund chief executive Matt Whineray and nephew of All Black great, the late Sir Wilson Whineray. He is also chair of the Prime Minister's Business Advisory Council.
Before Mercury, Whineray worked with New Zealand's biggest deal maker, Graeme Hart, while he was director of operational improvement at Carter Holt Harvey, and earlier contact when he headed the Puhoi Valley Cheese Company.
Mercury chair Prue Flacks said Whineray had led Mercury to a strong position.
"Fraser simplified the business through the divestment of overseas interests and the sale of its former smart metering business, Metrix; he oversaw the mothballing of the Southdown gas-fired power station in Auckland as the company turned its focus fully to renewable generation; he led a rebranding to Mercury from the two brands of Mighty River Power and Mercury Energy and he has developed with his executive team a compelling strategy for sustainable growth focusing on core pillars of the business," Flacks said.
Whineray took over as CEO from Doug Heffernan in 2014, when Mercury was called Mighty River Power.
He will continue with Mercury until his move to his new role at Fonterra around the end of the first quarter of 2020.
Flacks said the process to appoint a successor would begin immediately with an internal and external search.
News of the appointment comes as Fonterra' top management do the rounds with Australian institutions to talk about the company's strategy of getting back to basics.
Fonterra's NZX-listed units last traded at $4.08, up eight cents on the day.