Tuesday 11th January 2011
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New Zealand Farming Systems Uruguay (NZS) has appointed a director from majority shareholder Olam International as chairman of the board.
NZS replaced former chairman John Parker with fellow director Vivek Verma, who headed the coffee, dairy and commodity financial services divisions at Olam.
Parker, who was appointed chairman in December 2009, has also resigned as director.
The company is also replacing its chief financial officer, as existing CFO Andrew Clark had decided not to move to Uruguay for family reasons and is leaving the company next month.
PGG Wrightson Uruguay CFO Silvina Crosa will take up the role.
NZS is still seeking a chief executive with Alastair de Raadt leaving at the end of his short-term contract on January 31.
Olam is a Singapore-based ingredients company which owns a 78% stake in NZS after its takeover offer last year. The company has been seeking "appropriate" representation on the board of NZS.
The new shareholders were quite disappointed by the latest earnings downgrade in November and wanted to make changes to the business as quickly as possible, Verma told NZPA.
Olam also wanted to create "complete alignment" between the board, shareholders and management.
Two original board members remained - John Roadley and Graeme Wong - and Olam had wanted Parker to stay on as a director.
Verma described the departure as a "fairly amicable leaving".
While New Zealand farming systems worked well in New Zealand, he did not believe that they were necessarily suited to a non-temperate climate like Uruguay's.
Olam was not planning wholesale changes to NZS's operations, but did want to reduce the reliance on pasture for feeding stock.
The problem was not that existing management resisted change, but it was too far removed from the operations to run the business as well as they could, he said.
In contrast, Olam had significant South American operations.
The original management structure with an external manager - PGG Wrightson - had also been part of the problem.
NZS, which was using New Zealand farming expertise to build up a dairy farming business in Uruguay, has not met expectations in part because of disappointing milk production and dry conditions.
The company planned to provide an update about its outlook and business when it released its half-year results on February 17.
Shares in NZS last traded yesterday at 58c, well below the high of $1.86 in 2008.
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