| The ContiGroup Management Committee held two state-of-the-company meetings last week, first in Oakwood, Georgia on June 18th and then in Kansas City on June 21st. The meetings provided an overview of CGC's recent accomplishments and current objectives, and were attended by approximately 70 senior managers from throughout the company.
At the Georgia meeting, Paul Fribourg and Vart Adjemian also presented the first Michel Fribourg Outstanding Achievement Award to Wayne Farms LLC for exceptional performance in F2001--its third straight year of record results. CEO Elton Maddox accepted the award on behalf of Wayne Farms.
The MF award is intended to recognize performance that exceeds expectations, meets aggressive goals, and makes a significant contribution to the company and its growth. It will be presented annually and may be awarded to a division, an operating unit, a complex, a feedlot, or a department.
Wayne Farms takes first MF Outstanding Achievement Award for exceptional performance in F2001. Following the ceremony on June 18th, from left, ContiGroup CEO Paul Fribourg; Mike Roberts, Vice President and General Manager of Wayne Farms' Fresh Business Unit; Wayne Farms CEO Elton Maddox; and ContiGroup Chief Operating Officer Vart Adjemian. |
Reviewing the state of the company today, Paul Fribourg noted that CGC has made significant progress since 1999 in improving business results and in refining strategy both in New York and at the operating units.
Overall, the company continues to emphasize the importance of strong returns and appropriate rewards for superior performance, independently managed businesses combined with high standards of accountability, the pursuit of new opportunities by each business, consistent profitability and effective risk management, and strict attention to food safety and environmental affairs. Most importantly, CGC needs to work with "only the best people" and provide them with opportunities for growth--a critical factor in building successful businesses.
Paul also addressed the role of the CGC Management Committee, stressing its responsibility for setting company direction, managing capital at risk, and developing executive talent. "The Management Committee needs to understand and oversee, but not micro-manage the businesses," said Paul. At the same time, the committee has clear responsibilities to CGC's owners, directors, lenders, and regulators, and must thus meet the same standards of accountability that it sets for the operating units.
Turning to major accomplishments of F2001, Paul emphasized the strong performance of CGC operations, the continued efforts to reduce earnings volatility, and the debt refinancing of May 2000.
Elton Maddox and Vart Adjemian at the MF Award presentation on June 18th. |
The latter has improved CGC's liquidity and credit rating (currently "BB-" up from "CC" in mid 1999), reduced interest expense from $50 million to $30 million, and lowered the company's overall debt from well over a billion dollars in 1999 to less than $300 million. As a result, CGC today has the resources to finance new projects and other business development.
As for the current fiscal year 2002, Paul reviewed CGC goals in three main areas: "results, strategy, and people." In the first category, the principal goal is for CGC businesses to reach or exceed the established RONA target of 15%. Strategic goals include continued work on a variety of corporate and operating unit projects, as outlined below:
- Wayne Farms: integration of Peterson Farms/Crystal Lake operation; exploration of other opportunities as the poultry industry consolidates
- ContiBeef: further development of the ConAgra beef supply agreement; creation of a stronger cattle origination plan
- Premium Standard Farms: completion of the Lundy's expansion, the Texas S5 buildout, and the Farmer John supplier agreement
- International operations: Poland--close Animex transaction; Asian Industries--continue to build ContiFeed premix business and achieve a market share of at least 10%; help Great Wall Northeast Asia Corporation (GWNAC) to expand and become consistently profitable
- ContiInvestments: develop this business as a platform for diversification and future growth
- New projects: set up "skunk works" team to explore new investment in areas related to existing businesses
- Financial: begin discussions for next financing agreement by end of fiscal 2002; pursue possible credit rating upgrade with rating agencies
Finally, under the heading "people," ContiGroup must continue its efforts to build bench strength and develop the next generation of senior managers. This will be an ongoing challenge given the demand for talent within the food industry, and a major priority going forward for CGC businesses .
Summarizing these objectives, Paul stressed that CGC would continue to be an innovator in food and agribusiness, and a company with both capital for good projects and career prospects for good people. In addition, it would continue to focus strongly on performance management--on helping businesses and individuals to achieve their goals and rewarding exceptional results. "We want CGC to be a place where people enjoy what they're doing every day," he said, "and a winning company we're all proud to work for."
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