Synlait's Penno stepping down in 'orderly transition'

Synlait chief executive John Penno (right) and chairman Graeme Milne. Photo / Supplied

Synlait Milk co-founder John Penno will step down as chief executive of the company in the next 12 months.

In a statement, the company said it was part of an "orderly transition" to position Synlait for its next phase of growth.

"John has been an exceptional leader for Synlait but there was always going to be a time when he would move on to fresh challenges.

"I am glad John's decision has come at a time where we can provide a well-managed leadership transition. The company is in very healthy shape with a strong balance sheet and a clear future growth plan," chairman Graeme Milne said.

Brought up on a farm in Morven, near Waimate, Dr Penno co-founded Mid Canterbury-based Synlait in 2000 and has been the chief executive and managing director of the company for the past 12 years.

He was named Federated Farmers' inaugural agribusiness person of the year in 2009 in recognition of his contribution to the New Zealand dairy industry.

The board was embarking on an international search to find a new chief executive and Dr Penno intended continuing in the role until a successor was found, Mr Milne said. He also intended continuing as a director.

The new chief executive would be taking on a company in strong shape and with a clear vision and growth strategy, Mr Milne said.

It had grown from a start-up to a highly profitable company listed on the NZX and ASX, with 600 staff, a "blue chip" set of customers focused on the infant formula category and committed farmer-suppliers, he said.

At Synlait's annual meeting in Christchurch yesterday, Dr Penno signalled further expansion was planned with a second milk powder manufacturing site.

The company was also looking to acquire some land in the North Island to create a second site, which would provide access to a second pool of farm-suppliers.

Synlait's revenue rose 39% to $758.9million for the year to July, earnings before interests, tax, depreciation and amortisation was up 6% at $89million and debt had been slashed by $131million.

The company was looking for a chief executive with the skills and experiences to "take Synlait up another level", Mr Milne said.

"We have already signalled to shareholders our intention to continue to develop our infant formula business, and enter new categories where there are significant opportunities," he said.

Dr Penno said it was time to move on after 17 years of "living and breathing" the company. Once the new chief executive was in place, he was looking forward to getting back to his entrepreneurial roots.

He would be looking for opportunities to get involved with start-ups and young companies, which was where his wife Maury and he wanted to continue to make a contribution, he said.