Synlait founder John Penno to step down as CEO
Synlait Milk founder and chief executive John Penno is to step down after 12 years leading the Dunsandel-based milk processor, whose shares have almost tripled since listing in July 2013.
Penno will step down in the next 12 months in what the company said would be an orderly transition. He will stay on during an international search for his successor.
Penno, who has spent a total of 17 years with the company, said he was " looking forward to getting back to my entrepreneurial roots and will be looking for opportunities to get involved with start-ups and young companies, which is where my wife, Maury, and I want to continue to make a contribution."
Synlait has grown from a start-up in the early 2000s to a company with a market value of $1.4 billion today and customers including high-flying milk marketer A2 Milk. It was initially rebuffed in its attempts to go public by local investors and instead turned to China's Bright Dairy for equity capital to fund its growth. Bright Dairy now owns 39 percent of the company.
In September Synlait posted an 11 percent gain in full-year profit and flagged further growth this year while signalling a move into branded consumer goods. Its shares touched a record high $8.25 on Oct. 30.
"From this platform, the company is looking for a CEO with the skills and experiences to take Synlait up another level," chair Graeme Milne said in a statement. "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."
Discussing the move into new markets on a conference call in September, Penno said: "Up until now we've been strictly B2B, which has been very important during start-up." The company would move into branded products "where no conflict exists with existing partnerships" which meant it was "unlikely to be in infant formula", where companies such as A2 have very strong brands. "We do see areas in new categories that could be Synlait branded," he said.
In August Synlait announced plans to triple sales of infant formula to Sichuan-based New Hope Nutritionals, which is already its second-largest customer for finished infant formula and its largest under a Chinese label. Synlait took a 25 percent stake in New Hope in 2015.