Wesfarmers managing director Richard Goyder has seized an opportunity to fine-tune the conglomerate’s management team while continuing to build up its investment and acquisition focus.
Wesfarmers managing director Richard Goyder has seized an opportunity to fine-tune the conglomerate’s management team while continuing to build up its investment and acquisition focus.
The planned management changes, triggered by next month’s departure of senior executive David Robb, include the splitting of the energy division into two operations, centred on Queensland and Western Australia.
Mr Goyder has also shifted additional responsibilities to finance director Gene Tilbrook, who will chair a newly formed investment review committee.
The committee, which will oversee all major new capital expenditure or acquisition proposals, has been formed at a time when market observers are looking for Wesfarmers to launch its next big growth initiative.
Formation of the committee follows a gradual build-up over the past year in the number of commercial and business analysts in each of Wesfarmers’ business units.
Traditionally the group has relied on its business development team in head office to identify big growth opportunities.
“We have strengthened the business development capabilities of each of the business units,” general manager corporate affairs Keith Kessell told WA Business News.
“They will be able to do more of that work, rather than being reliant on the corporate office.”
The major change to the management structure will be the creation of a stand-alone coal division, managing the Curragh mine in Queensland, the Premier mine at Collie and the 40 per cent-owned Bengalla mine in NSW.
Coal made a big contribution to Wesfarmers’ 2005-06 profit, reflecting record coal prices.
The new division will be run by Stewart Butel, who is currently director coal operations and will continue to be based in Brisbane.
Mr Butel ran the Curragh mine when it was acquired by Wesfarmers in 2000, and more recently had a stint as managing director of Premier Coal.
The remainder of the energy division will be run by Tim Bult, who joined Wesfarmers in 1999 and is currently general manager of Kleenheat Gas.
The restructured energy division will retain responsibility for Kleenheat Gas, LPG, energy generation and 40 per cent-owned Air Liquide.
Mr Butel and Mr Bult will report directly to Mr Goyder and will be appointed members of the company’s executive committee.
Membership of the executive committee has expanded to 15 people as a result of this and other changes (see graphic).
Others to join the executive committee next month include business development chief Tom O’Leary, human resources head Chris Ryan and finance general manager Luigi Mottolini.
As part of the changes, Mr O’Leary and Mr Ryan will report directly to Mr Goyder.
Finance director Gene Tilbrook has been given responsibility for the group’s legal, corporate secretarial, investor relations and corporate planning functions.
The latest changes follow the appointment last November of Terry Bowen as managing director of the Sydney-based industrial and safety business.
The relative youth of the executive committee members should provide Wesfarmers with several internal candidates to succeed Mr Goyder as managing director.
Mr Goyder, who took the top job last July, is only 46 and, subject to performance, can be expected to stay in his current role for several years at least.
Mr Goyder’s successor is likely to come from people such as 40-year-old Bunnings boss John Gillam, 42-year-old CSBP boss Keith Gordon or 42-year-old Mr O’Leary.
While Mr O’Leary is a relative newcomer to Wesfarmers, having joined the group in 2002 after working overseas, most other members of the executive committee have extensive experience in the group.
The big strategic challenge facing the management team at Wesfarmers is to find major growth opportunities that will elevate its financial performance.
In the past two years, Wesfarmers has mostly been a seller, disposing of its rural Landmark business and its 50 per cent interest in Australian Railroad Group.
In the absence of big acquisitions, Wesfarmers is continuing to make substantial investments in its existing businesses, with capital spending budgeted at $800 million.
Big investments have included a $360 million expansion of its Curragh coal mine and continual upgrading and expansion of its Bunnings stores.
It is also proceeding with a $260 million expansion of CSBP’s ammonium nitrate plant at Kwinana, despite a large cost increase.
