Swiss dairy and infant formula group Hochdorf has attempted to shore up its troubled subsidiary Pharmalys Laboratories by appointing its own interim CEO Peter Pfeilschifter to head up the business.
It has effectively taken over responsibility for operational activities at the Switzerland-based infant formula maker in which it has a 51% controlling stake. Pfeilschifter becomes CEO of Pharmalys with immediate effect.
Last Tuesday (20 August) Hochdorf announced a “massive collapse of earnings” in the first half of the year and warned it is “currently in the grip of a serious crisis”.
It said its problems are linked to the “negative performance” of Pharmalys.
Now it has acted to stop the rot by appointing Pfeilschifter, who is chairman of the Pharmalys board as well as being interim CEO of Hochdorf.
In a statement Hochdorf said: “This change is necessary following the resignation of [founder] Amir Mechria from all his functions with Pharmalys Laboratories. With this decision, Hochdorf assumes responsibility for the operational activities of Pharmalys Laboratories.”
Pfeilschifter became interim CEO of Hochdorf after the departure of former CEO Thomas Eisenring on 11 March. He was further appointed head of Hochdorf’s dairy ingredients activity on 29 March. He was previously head of Uckermärker Milch when Hochdorf acquired the company.
Last week Hochdorf said it must “reorient itself,” and said that, following a reassessment of operational risks with Pharmalys, it was “necessary to set up considerable provisions for doubtful debts” amounting to CHF35.2m (US$35.9m), which contributed to its loss of CHF63.6m in the six months to 30 June.
Since those results Stichting General Holding has increased its stake in Hochdorf to 15.5%, up from 5.8%, to become the company’s largest minority shareholder.
Hochdorf said in July it planned to focus its operations on the baby food market following a business review in May.
It previously said all options for Pharmalys are on the table including a sale of the business.
Speaking about the new CEO appointment, analyst Alain Oberhuber of MainFirst said: “We conclude that the nomination makes sense, although we think that there is an accumulation of duties with one person as interim CEO at Hochdorf, chairman and CEO Pharmalys, and head of dairy ingredients. In our view, this shows a lack of top managers within Hochdorf, and we remain on the sidelines for the time being.”