New Zealand dairy giant Fonterra has announced that chief executive Theo Spierings will leave his role later this year. The announcement comes after Fonterra was forced to take a NZ$405m (€236m) write-down on the value of its investment in Chinese infant formula company, Beingmate.

Fonterra paid NZ$756m (€440m) for an 18.8% stake in Beingmate in 2015. However, Beingmate has run into financial difficulty in recent years, reporting financial losses for the last two years. The company has also seen its share of the €30bn Chinese infant formula market fall sharply over recent years from almost 10% in 2014 to just 2.5% of the market last year.

As a result, Fonterra has been forced to revalue its minority stake in Beingmate to NZ$422m (€142m). This impairment charge resulted in the co-op reporting a half year loss of NZ$348m (€203m).

“We do not have direct control over the company but we are influencing its direction and continue to call for an urgent business transformation,” said Spierings.

On top of its China woes, Fonterra said it had paid NZ$183m (€107m) to Danone, following a product recall in 2013 linked to a false botulism scare.

The combination of these financial setbacks and growing farmer anger at a grassroots level has heaped pressure on Spierings over the last year, ultimately leading to his decision to step down. Replacement

Fonterra said it has been conducting an international search for a replacement for Spierings since November and was now shortlisting potential candidates for the position.

“It is not yet clear exactly when any appointment for Theo’s replacement will be made, but it is absolutely clear that Theo will continue in the meantime to drive the Co-operative’s strategy and business, with special emphasis on China,” Chairman John Wilson said. “We envisage that even after the announcement of our new CEO, Theo will be involved in an advisory role so that we make best use of his knowledge and expertise during the transition.”

Spierings said that in his seven years as CEO the Co-op established a stong demand led strategy.

“It is now time for a new CEO who can lead the Co-operative through this next phase. The time is right for the Co-operative and that is important to me and to the Board,” he said.

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