鈥楥hicken King鈥� Boparan ousts poultry chief to stem losses
The management shake-up comes as 2SFG prepares a formal auction of its Fox鈥檚 Biscuits unit, Sky News learns.
Friday 8 November 2019 12:27, UK
The food industry tycoon known as the 鈥榗hicken king鈥� because of his vast poultry production interests has ousted one of his empire鈥檚 top executives as he puts more of its assets on the block.
Sky News has learnt that Ranjit Boparan, whose 2 Sisters Food Group (2SFG) is one of Britain's biggest private sector employers, is to take back day-to-day management control of the company's core poultry operation in an effort to stem losses.
In an internal memo circulated this week, Mr Boparan and Ronald Kers, Boparan Holdings' president and group chief executive respectively, informed employees that Andrew McInnes, UK poultry managing director for just a year, was leaving the company.
The division's commercial director, Dan Howell, is also departing.
Sources said on Friday that the changes had been instigated by Mr Boparan amid mounting frustration over the performance of the poultry business, which supplies the UK's biggest supermarket chains.
The shake-up of senior leadership comes two years after 2SFG was hit by a food hygiene scandal in 2017, when a Guardian and ITV undercover investigation revealed a host of failures to adhere to industry standards.
The crisis triggered an appearance by Mr Boparan in front of a parliamentary select committee, with MPs reporting that the company's "past record…[was] far from pristine".
Mr Boparan's move to seize the reins of the poultry business on a caretaker basis leaves him in the bizarre position of reporting to Mr Kers in his capacity as group CEO, who is then accountable to Mr Boparan as the company's controlling shareholder.
Food industry sources pointed to growing tensions between Mr Boparan and Mr Kers, who was recruited over a year ago from Muller, the dairy products group.
Mr Kers is understood to have parachuted in a number of former Muller colleagues on lucrative contracts, which is said to have created unease among existing 2SFG executives.
Boparan Holdings, which has £630m of debt repayable in 2021 in the form of high-interest bonds, has been steadily selling assets in an effort to reduce its debt pile.
It has already offloaded businesses including Goodfellas, the pizza brand, and more recently Matthew Walker, the UK's biggest supplier of Christmas puddings.
Sky News understands that the company is now preparing to kick off a formal auction of Fox's Biscuits, one of the best-known players in the sector, in the new year.
Bankers at Rothschild are handling that process.
Other disposals will follow, although 2SFG's substantial ready-meals operation is unlikely to be put on the block.
In total, Boparan Holdings employs about 18,000 people, with more than 15,000 of those based at various manufacturing sites across the UK.
An industry insider said that when the non-core disposals had been completed, it was likely to raise questions about the future of Mr Kers's role.
"Ranjit has essentially lost patience and taken back control.
"When your key poultry team doesn't deliver, it was obvious a keep-it-simple guy like him wouldn't tolerate it, especially with their poor cash position and debt pile.
"So he's back doing what he loves, running the main division day-to-day.
The source added that there "must be a big question mark about Kers' long-term future now".
"The way these changes were made and what they symbolise fundamentally undermines his [Mr Kers'] authority."
"2SFG's poultry division accounts for roughly £1.5bn in annual revenues - or about 60% of the group total.
Mr Boparan, who left school aged 16 and founded 2SFG in 1993 as a supplier of own-label chicken to Tesco, is expected to announce quarterly results to bondholders next week.
A spokesman for Boparan Holdings said: "The business has posted very encouraging financial results and this is set to continue as we realise our turnaround plan."
"However, in order to accelerate this plan our senior leaders have decided to take a more hands-on approach.
"Ranjit and Ronald have one clear goal in mind, which is to continue to deliver improved results for the business.
"Already our changes have seen improved performance and we look forward to delivering our transformation plan for all stakeholders."