Fraser Whineray: a results-oriented business leader with a track record on decarbonisation

Fonterra’s  board,  under   heavy  fire   for the losses racked up  in  the last two years,  may at last   be getting something  right.  Its recruitment of  Mercury’s  CEO Fraser Whineray to the newly created  post of  chief operating  officer   puts him in pole position to drive innovation,  efficiency, and  sustainability  in the co-op.

When he joins  Fonterra  next year  he will bring with him the credentials of having transformed Mercury,  simplifying the business  through the divestment of overseas interests and developing a  compelling strategy for  sustainable growth.

Harbour  Asset Management’s Shane Solly  said Whineray adds  “a  bit of grunt to the front row at Fonterra”.

In that  context, Point of Order  notes, Whineray  would be following the example of  his  renowned uncle,  the late Sir Wilson Whinerary,  who not only  captained the All  Blacks from the front row, but subsequently  had a  successful career as a businessman and  company director.

That’s  not the only distinguished family connection. His  brother  Matt is  chief  executive  of the  NZ  Super Fund.

At  Mercury,  where he has been  earning a salary  of close to  $2m, he proved himself  as  a  “results-oriented”  NZ business  leader.

He  started  his career as a graduate of the NZ Dairy Board’s technical training programme and spent time at some of Fonterra’s sites and in its export markets.

He has held roles at Credit Suisse, Puhoi Valley Cheese and Carter Holt Harvey and is chair of the Prime Minister’s Business Advisory Council.

Miles Hurrell, Fonterra’s CEO, reckons Whineray has demonstrated he can transform organisations to achieve growth in complex environments through a focus on innovation, customers and his team.

So  what  can  Fonterra’s  shareholders and suppliers  expect  from  Whineray?

Let’s  look in more detail   at  his  record  at  Mercury.

Whineray  has been a   key  figure in the geothermal renaissance in NZ which has  been been the greatest decarbonisation achievement of the century, displacing fossil fuels. Renewable steam powers 17% of the country’s electricity without the need for rain, wind or sun.

Earlier this year Mercury announced the development of the company’s first wind farm, being built at Turitea near Palmerston North at a cost of  $265m.  It is NZ’s first major generation development since 2014 and will produce enough electricity for more than 200,000 cars, and will work well in combination with the largest peaker in the North Island, which is the Waikato hydro system.

There’s  a  message  for  climate  change warriors and  extinction  rebellion campaigners  in the Mercury record  under  Whineray,

He says NZ is in the box seat for a world desperately looking for decarbonisation that works.

Our electricity system is already renewable, reliable and low cost.It is a story that needs to be more widely known, and shared. NZ’s renewable electricity system is a true competitive advantage. The two global technologies of wind generation and electrification of transport are arriving in perfect time for NZ to extend this competitive advantage, lower structural costs in the economy, reduce emissions, improve balance of payments and improve wellbeing.  And just as NZ is in the box seat for decarbonisation, Mercury is in the front row, and has a balance sheet, bench strength, focus and development pipeline to support that position”.

From that   background, farmers  can expect  Whineray to lead the charge in  accelerating  the  mitigation of  the negative impacts  of dairying on global warming.

Just  as he turned Mercury’s focus fully to renewable generation, he simplified the business through the divestment of overseas interests and the sale of its former smart metering business, Metrix  for  $272m and he oversaw the mothballing of the Southdown gas-fired power station in Auckland.

Whineray  is  a great believer in partnerships. He says  they have been very important for  Mercury because

“ … they help us achieve more without having to DIY everything. We have taken our landowner partnerships at Turitea to the next stage with the commencement of the Turitea wind farm.  And on the larger scale, we have continued to invest in our commercial geothermal partnerships with Maori land trusts: the Tuaropaki Trust and the Tauhara North #2 Trust. Mercury has the largest commercial partnerships with the Maori economy of any listed company, by some distance.

“While an emphasis on the Maori economy is receiving a lot of attention of late, Mercury initiated and developed these relationships, and near billion-dollar joint ventures, starting about twenty years ago. What these Maori land trusts achieve for their people with their share of the cashflow is phenomenal and we are inspired by their approach”.

Alongside  his belief  in partnership, Whineray uses a system of  high performance  teams within  the Mercury corporate  structure.

He says quality teamwork is a very delicate and critical value driver for productivity, quality decisions and long-term outcomes.

“A great team can get through the mahi 10 times better than a non-performing team. There is no physical or technology asset can get that performance uplift for an equivalent investment. Along with the new work environment, High Performance Teams foster a more agile work flow around business priorities”.

Whether  other  ideas  Whineray  may introduce   to Fonterra  will be  easily applied remains to be  seen.

For  example, he  changed the way they work  at  Mercury HQ in Newmarket. He  has no office, no desk and the same laptop as everyone else.

It  might  be popular    with   Fonterra’s   farmer-suppliers  but  would that go down  well in millionaires’ row  at Fonterra?

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