Tiger Brands’ CEO retires, CFO takes helm

After a troubled tenure of only four years, the CEO of Tiger Brands, Lawrence Mac Dougall, retired on January 31, having reached the company’s mandatory retirement age of 63.

Chief Financial Officer Noel Doyle takes over as CEO from February 1 and Mac Dougall, who has headed Tiger Brands since March 2016, will stay on until March 31 to ensure a smooth handover.

“We want to thank Lawrence for almost four years of devoted service which involved many accomplishments and wish him all the best,” Board Chairman Khotso Mokhele said.

“The board and I are pleased to have appointed someone of Noel’s calibre, experience and ability to fill the CEO position.”

Under Mac Dougall, the company has been pulling back elsewhere on the continent, selling businesses in Nigeria, Ethiopia and Kenya as part of a refreshed strategy to boost its core portfolio in South Africa.

The company grappled with the infamous 2018 listeriosis outbreak that killed more than 200 people in South Africa and was traced back to a factory operated by Tiger Brands-owned Enterprise Foods.

Its shares trade more than 40% lower than before the outbreak and the company faces a class action lawsuit over its role in the outbreak.

The facilities have since re-opened but the Value Added Meat Products (VAMP) business, linked to the outbreak, has seen sales dive and operating losses.

Tiger Brands is exploring the sale of the business after a review last year concluded it was “not an ideal fit” in its portfolio. 

Reaction to Doyle’s appointment

Tiger Brands chair Khotso Mokhele has defended the company’s decision to appoint Noel Doyle as its new CEO one of the executives who was embroiled in its previous big scandal a decade ago, before the 2018 listeriosis  outbreak that killed more than 200 people.

The company’s choice of Doyle, who was among a group of executives disciplined for their role in bread-price fixing, raised some eyebrows among analysts who were also sceptical about the appointment of an insider who was at the heart of management teams during its most troubled periods.

Doyle was sanctioned for his role in the price-fixing scandal and the maker of Albany bread admitted to colluding with some of its rivals, paying a fine of R98.7m.

Doyle was among a group of 26 executives given a final written warning. He left the company in March 2008 and returned in 2013.

Speaking to Business Day TV, Mokhele said Doyle had headed the bakery business, “which was not a senior role”, when the price fixing took place between 1996 and 1999.

“He is an exceptionally talented individual who is committed to Tiger Brands as a company. He shared with the board a vision that was very attractive. It does not mean that the board pretends that this history does not exist. But taking the package in its totality, the board unanimously appointed him,” Mokhele said.

‘Skills, experience and knowledge’

Doyle, a former CEO of Nando’s Southern Africa, was appointed after an extensive local and international recruitment process. “We are confident that he has the right combination of skills, experience and knowledge to lead Tiger Brands from day one,” Mokhele said.

Damon Buss, an equity analyst at Electus Fund Managers, said he did not hold high expectations of Doyle despite his experience.

“He has been the second in charge — as COO and CFO — under the firm’s last two CEOs. He has played a key role in the strategic decisions that have resulted in the poor operational performance of Tiger Brands over the last three to five years.”

Buss said Mac Dougall’s tenure as CEO had been “very disappointing”. Tiger Brands’s organisational structure had become complex, affecting accountability, decision-making and innovation.

But Ron Klipin, a senior analyst at Cratos Asset Management, said Doyle was the right person to steer the company. “I was surprised that he was not made CEO before.”

Tinashe Kambadza, an equity analyst at Afrifocus Securities, said Tiger Brands had recently lost some ground to its competitors because it was “not agile enough at a competitive level”.

Cosatu, the Congress of South African Trade Unions, has weighed in on the move, saying it has “noted with concern the offensive decision by Tiger Brands to appoint Noel Doyle as its new Chief Executive Officer. Mr Doyle was disciplined for his role in the bread price-fixing scandal.

“The price-fixing episode represented naked theft and the pickpocketing of the poorest consumers of their meagre incomes.”

Source: Cosatu, Reuters, BusinessLive.co.za

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