Analysis Chris Dane
Is ForFarmers taking a gamble with a new CEO?
Even faster than expected, ForFarmers found a new CEO. 55-year-old Chris Deen, currently CEO of Aviko, may lead the listed animal feed group through turbulent times; with the decline of the livestock population in the home markets as the main challenge. The choice for Deen is striking. The timing of the announcement is also noteworthy.
On the evening before the General Meeting of Shareholders, at which the then still incumbent CEO Yoram Knoop was waved goodbye, ForFarmers issued a press statement announcing that Deen will succeed him. This could of course be a coincidence, but it seems deliberately timed. He will take office on 1 July. In mean time CFO Roeland Tjebbes will do the honors and ForFarmers will not make any strategic changes. Those plans will be revealed 'some time' after Deen takes office, it was indicated.
Course Changes Upcoming
Course changes appear to be imminent. ForFarmers must take action to get the sales volume back above 10 million tons. Expansion to a sixth country is therefore the most obvious choice, given the decline in volumes on the existing markets. At the same time, the question is whether they dare to dive into the Asian market, for example. Under Button, whom she loved in Lochem after more than eight years were looking forward to, ambitious plans were formulated two years ago to move outside of Europe. Those plans went through disappointing results the fridge again .
The choice for Deen confirms that ForFarmers has not necessarily chosen the beaten track in the search for a new CEO. Deen does not know the feed market, nor the commodity trade around it. This is a gamble, but shouldn't be a problem. In fact, it can actually be refreshing. Just like former FrieslandCampina CEO Cees t'Hart was not at home in dairy farming and dairy, but managed to lead the cooperative successfully. In addition, with COO Pieter Wolleswinkel, Deen will have a good right-hand man who is at home in the market. Including a battalion of managers, consultants, purchasers and nutritionists.
Results under magnifying glass
Deen has extensive management experience. He was final boss at Bakkersland for a few years, before starting his job at Aviko two years ago. At Bakkersland he grew from CFO to CEO. An extra dimension in his new role at ForFarmers is the company's listed nature. This puts the results under a magnifying glass. What also argues in favor of Deen is that he is used to dealing with a farmer's constituency. Anyone who understands the language of arable farmers can probably also connect with livestock farmers, or so the Supervisory Board must have thought. On this point, Knoop did not excel, although Deen cannot be called an agricultural figurehead in advance.
People who have worked with Deen describe him more as a solid manager than a dynamic change manager with wild ideas. He can be forgiven that Deen drops out early at Aviko. After all, the move to the listed ForFarmers can be seen as a promotion in relation to the potato group, which – with all due respect – is a subsidiary of Cosun. The main challenge in his new job is to regain investor confidence and thereby boost the share price again. The only remedy for this seems to be rest and results. In recent years, ForFarmers was one of the worst-performing funds on the Damrak, with the unfortunate fact that the animal feed group often does not fit into 'green investment portfolios'.
A sixth country?
ForFarmers needs growth potential to get back on the minds of investors. That is now lacking, due to the challenging conditions in the home markets. Simply continuing and optimizing the activities in the existing markets is probably not enough. New impetus is needed, as was actually formulated by Knoop two years ago. The balance sheet of ForFarmers is strong enough to tap into a sixth country.
Whether that will be in or outside of Europe, we will probably hear sometime in the fall. And if they are really looking for a market with potential at ForFarmers, the fast-growing fish feed market could also be an option. Although that is a leap of faith, which in turn does not fit with the company's Achterhoek roots. In any case, Deen is waiting for a challenging job and will have to work hard. Or 'push', so to speak, to use potato terms.
Wouter Job
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