T&G chief executive has "full support"

Additional reporting by Tom Bicknell, Asiafruit 

The chairman of New Zealand's largest fresh produce exporter, Turners & Growers (T&G), has attempted to play down speculation about a supposed crisis of confidence in the company's leadership following a recent restructuring which saw a number of key management personnel depart the firm.

Responding to rumours circulating that a vote of no confidence in chief executive Geoff Hipkins had been narrowly defeated during the group's recent board meeting, Klaus Josef Lutz insisted no such motion had been tabled and dismissed the speculation outright.

"Rumours in New Zealand concerning Geoff Hipkins and any idea of mistrust are an absolute lie," he told Eurofruit. "Wherever the board had to take certain decisions or adopt resolutions, the votes were unanimous on all topics. Geoff has the full support of the board and there is no question whatsoever about his performance, his ability or his experience."

Over the previous fortnight, a number of sources close to the company had suggested there was some concern among a certain section of the T&G board of directors about the departure of several of the group's experienced managers.

Lutz, chief executive of T&G's German majority shareholder Baywa, denied the suggestion that Hipkins' position might be in any doubt.

"We are very pleased with Geoff Hipkins' performance," he commented. "In fact, he prepared a strategic paper `on the possible future direction of the group` for us within six months, earlier than the nine months we had asked for."

Lutz also addressed recent press reports questioning the timing of that reorganisation, revealing that certain aspects of the company's operations had unexpectedly required more immediate attention.

"I know that there have been some questions raised regarding the layoffs we made and some of the decisions Geoff took. We made further findings after purchasing the company which meant it was necessary to move faster."

He added: "I can understand if former managers are still concerned, but there has been no discussion within the group about trust, confidence, credibility or whatever."

Profit potential

Although the company recently issued a proft warning for 2012 based primarily on expected writedowns of apple, kiwifruit and lemon production areas, Lutz said he was "very pleased" with T&G's operational performance and revealed that the group was in fact expected to generate a profitable contribution to Baywa's overall business.

"As far as we can see, earnings before interest and taxes will be €15m plus a little bit in 2012," he explained. "I know this contradicts the profit warning, but that had to do with the first quarter and the writedowns we had to make on that side of the balance sheet. We also expect higher profitability in 2013."

According to Lutz, growers of the Jazz apple variety in New Zealand enjoyed better returns in 2012, reportedly receiving an average of NZ$22 (€13.92) per carton compared with NZ$22 (€11.38) over the previous season.

"The market and the currency rates have been better, but we have also been able to optimise the supply chain for Jazz," he noted.