Mengniu’s chief executive, Sun Yiping, has stood down amid a number of board-level resignations at the Chinese dairy giant.
Sun resigned from her roles as chief executive, executive director and a member of the strategy and development committee. According to Mengniu: “Ms. Sun has tendered her resignation due to personal career development reason.”
Sun will be replaced by Jeffrey Lu, who is currently chairman of Yashili International Holdings, the infant formula group and subsidiary of Mengniu that is also part listed on the stock exchange and in which Danone holds a stake.
Prior to serving as chairman, Lu was CEO of Yashili and he has also headed up each of Yashili’s business units. Before that, Lu oversaw Danone’s early life nutrition business in China. He worked for Danone for over ten years.
“During the tenure at the Danone Group, he demonstrated strong strategic business and market planning capabilities. With strong leadership, management skills and in-depth knowledge of markets, Mr. Lu contributed significantly to the success of the Danone Group’s baby nutrition business in China,” Mengniu said in a stock exchange announcement.
Alongside the departure of Sun, Mengniu revealed a number of other board level exits. Yu Xubo, Liu Ding and Dr Liao Juanwen have all resigned, the company said. Mengniu said that the resignations will allow the company to cut the size of its board from the current 13 directors. “With a smaller number of directors, the Board may operate more efficiently in its decision making process.”
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Mengniu stressed that there was no conflict between the board members who resigned and the rest of the board. “Each of Ms. Sun, Mr. Yu, Ms. Liu and Dr. Liao has confirmed that he/she has no disagreement with the board and there is no matter in relation to each of their resignation that needs to be brought to the attention of the shareholders of the company.”
In its most recent results, for the first six months of the year, Mengniu has been able to grow sales by increasing its investment in marketing and brand promotion. The company has also strengthened its product mix, resulting in higher gross profit. But increased expenses and losses from associate companies has, nevertheless, placed net profit under pressure.