AFTER an all-day meeting in the Limerick Inn Hotel, the board of Golden Vale has confirmed 50-year-old Dubliner Mr Jim Murphy as chief executive of the Charleville based agri-business group.
Mr Murphy succeeds Mr Jim O'Mahony, who was removed from office last June after a controversial 8-7 vote by the group's board of directors. But in contrast to the dissension surrounding the removal of Mr O'Mahony, Mr Murphy's appointment as his replacement is believed to have been unanimous, although, one board member is understood to have been absent from the final deliberations. Mr Murphy takes over the chief executive's job in February next year.
Golden Vale chairman Mr Pat, McKenna said: "We are delighted: Jim Murphy will be joining the group. He has very relevant skills and experience and will greatly assist in the ongoing development of Golden Vale. Jim has an excellent track record in the dairy industry covering milk procurement, manufacturing, product development and `marketing."
The new chief executive is commercial and operations director of The Cheese Company, the biggest cheese processor in Britain which was acquired last year by Waterford Foods for £125 million. Mr Murphy was a member of the management buy-out team which bought The Cheese Company from Grand Metropolitan in 1992 for £96 million.
The unanimous decision by the Golden Vale board suggests the IS board members, who split almost evenly on the decision to remove Mr O'Mahony, have, for the present, decided to put the past behind them band install a chief executive who will have the difficult job of restoring the group's fortunes.
But even if the divisions in the board have been put aside, Mr Murphy faces a difficult job when he takes over at the helm of Golden Vale. The group's standing among institutional investors has been shattered by a series of unfortunate events, beginning with the profit warning on the eve of the World Cup in July 1994 and culminating in the £3 million superlevy fine that led to the removal of Mr O'Mahony as chief executive.
Much work needs to be done to restore Golden Vale's reputation among investors, who will want to see a clear recovery strategy introduced at an nearly date.
Mr Murphy will also have the job of imposing a severe cut in milk on Golden Vale milk suppliers who are already suffering from superlevies for being over the quota as well as the superlevy fine. Getting agreement on a milk price that will not put Golden Vale at a competitive disadvantage to neighbours
Dairygold and Kerry will be another serious test of Mr Murphy's abilities.
The new chief executive will also have to get to grips with the situation at the Vonk cheese subsidiary in The Netherlands which has been a constant drain on the group ever since it was acquired three years ago. Much has been done to sort out Vonk, but at some stage in the current year Mr Murphy and his board will have to decide whether Vonk will ever produce an acceptable return or whether it is more cost effective to close it down.
As a member of the MBO group which held 6 per cent of The Cheese Company equity (venture capitals companies held the rest), Mr Murphy would have been a significant beneficiary of the £125 million buy-out by Waterford Foods in September last year.
Prior to that MBO, Mr Murphy had spent most of his working life in the food industry with the Express Foods subsidiary of Grand Met. An accountant, Mr Murphy joined, Grand Met in the early 1970s when it acquired the Bovril group. He subsequently moved from the finance; function to become managing director of Express's fresh foods division in 1979. In 1984, he was appointed director of milk procurement within Express and in 1988 was appointed to the main board as commercial director. The MBO from Grand Met followed in 1992.
Mr Murphy is married and has three adult children.
