Lawrence MacDougall. Picture: SUPPLIED
Lawrence MacDougall. Picture: SUPPLIED

LAWRENCE MacDougall, Tiger Brands’ new CEO, may have just the right touch to bring life to the food producer following a shopping spree gone awry.

The company wants to climb the value chain to higher-margin products such as confectionary and snacks.

“His experience on those fronts will bode well as they look to... improve the margins of return they receive,” said Jiten Bechoo, analyst at Avior Capital Markets, after MacDougall’s appointment last week.

MacDougall joins Tiger Brands (producer of Oros, Doom and Koo, among many others) at a time when it battles competition in SA, while picking up the pieces of a failed expansion in Nigeria.

Peter Matlare had been running the company for seven years when he suddenly stepped down as CEO in December.

Matlare’s resignation came after the company struggled to turn around its loss-making acquisition, Dangote Flour Mills, in Nigeria.

It eventually wrote off nearly US$1bn on its value.

Until recently MacDougall was executive vice-president and regional president for Eastern Europe, Middle East and Africa at a Tiger Brands rival, Mondelez International. He has more than 25 years’ experience in the fast-moving consumer goods market — in confectionery, beverages, snacks, groceries and biscuits.

He joined Cadbury SA in 1982 and later served as MD of its Southern African hub.

In mid-2000 he was promoted to more senior positions in Cadbury. In 2010, US food group Kraft acquired Cadbury.

“He moved up quite quickly and then assumed the role of East Africa president for Kraft. He remained chairman of Cadbury Nigeria,” Bechoo says.

In 2014 he took on the executive role at Mondelez.

MacDougall, a South African, was among 36 candidates screened and reviewed for the CEO position, according to Tiger Brands. Six of the hopefuls were Tiger staff members.

“MacDougall was selected on account of his extensive fast-moving consumer goods and multigeography experience, knowledge and leadership style,” the company says.

He is expected to join Tiger during the second quarter of this year.

Bechoo says: “(MacDougall) has a legacy in SA; he is familiar with the region into which Tiger exports materially and also beyond our near borders.

“He has experience there, which bodes well for Tiger’s efforts in those particular geographies.” A bricks-and-mortar expansion may not be MacDougall’s immediate focus.

African countries are suffering under weaker commodity prices, analysts say. Rather, a turnaround strategy is likely to remain in place for another 18 months.

Growing the top line in SA will be challenging. Food prices are expected to rise in double digits to absorb pressure caused by the worst drought to hit SA in more than 20 years.

Bechoo says: “Profit margins are still likely to fall but not by as much as perhaps we were initially expecting. Food is defensive, to some extent.

“I think more of the pressure generally in consumer spend will fall on discretionary-type products.”

These include furniture, large appliances and electronic products, as well as clothing.