Fonterra moves NZ Milk to Auckland, loses managing director

2.30pm - By KENT ATKINSON

Fonterra Co-operative Group Ltd says David Pilkington, the managing director of its key consumer brands division New Zealand Milk, is leaving his job in the latest restructuring of New Zealand's biggest business.

Fonterra is transferring the Wellington-based NZ Milk arm to Auckland. NZ Milk runs the company's consumer brands around the world.

Mr Pilkington, the last of the high-profile executives inherited from the Dairy Board, has said he does not want to move to Auckland.

New Zealand Milk will transfer to Fonterra's new Auckland head office in Princes St by about May next year, the company said today.

"David Pilkington has regrettably decided he does not want to leave Wellington for family reasons, but has agreed to remain with Fonterra as a consultant," said Fonterra's new chief executive, Andrew Ferrier. "David will continue in his current role until a global search identifies his successor and the re-organisation is finalised," Mr Ferrier said in a statement.

Mr Pilkington will continue to serve on the board of Fonterra's joint venture with Nestle -- Dairy Partners America -- and said in the statement he was "supportive" restructuring and particularly optimistic about NZ Milk and Fonterra's future potential.

"We are getting the right structure to capitalise on the market opportunities and to gain the benefits from integration," Mr Pilkington said in the statement.

Mr Ferrier emphasised NZ Milk would retain it independence: "It is important for NZ Milk to continue to develop as our fast-moving dairy consumer products company and this new model will effectively increase the business unit's profile within Fonterra."

In addition to moving NZ Milk's decision-making to Auckland, Fonterra will transfer 10 key executive jobs managing specific product categories "out into the global market".

"Our category management teams will be at their most effective when they can see consumer trends first-hand in the market," he said.

A further important change in senior management will be the axing of the role of chief development officer, done by former German executive Alexander Toldte.

Mr Toldte was also the managing director of Fonterra Enterprises, which effectively runs its merged domestic subsidiaries Fencepost and RD1, which dominate New Zealand's $5 billion rural merchandising sector.

Mr Toldte was previously best known in New Zealand as the executive who delivered a body blow to Fletcher Challenge Building, when he quit as its chief executive designate in January 2001 -- before that business had established itself as an independent company.

Today, Mr Ferrier said Fonterra had used Mr Toldte's technical knowledge in its global outsourcing project, development of the company's business strategy, and in improving the performance improvement of the businesses reporting to him.

"We wish Alexander well in his next assignment," he said.

Mr Ferrier said the company's chief financial Officer Graham Stuart would assume the a role of "group director, strategy and growth".

This new job placed stronger focus on examining all opportunities for growth, particularly through the mergers and acquisitions that could springboard Fonterra into new market positions, and would cover not only mergers and acquisitions, but government and trade strategy, legal, information services and technology.

Fonterra would also undertake a global search for a new chief financial officer.

The company's latest director of human resources, Glen Petersen, had also "decided to pursue other career opportunities outside the dairy industry", and a global search would also be undertaken to replace him.

Mr Ferrier said Mr Petersen had established a basis for the co-operative's "shared culture", in the wake of merging the Dairy Board, Kiwi Cooperative Dairies and NZ Dairy Group.

Mr Toldte and Mr Petersen would remain in their current roles until the end of the year, and Mr Stuart would continue his work as chief financial officer until a suitable replacement candidate was found.

Some New Zealand Milk staff would transferred from Wellington to Auckland by May 2004, but there would also be redundancies in Wellington.

- NZPA