CSR's Chairman, Dr Ian Blackburne, said "While the Board is yet to formally sign-off on the demerger proposal, we have reached initial agreement on key initiatives which are part of establishing two independent, strong and focused companies listed on the ASX."
"The Board will continue to review all available options to create additional value for shareholders, however, following substantial due diligence, it is our view, that a demerger to create two, more focused and specialised businesses is the outcome most likely to be recommended to shareholders."
If the demerger proceeds, CSR Ltd will continue as a focused residential and commercial Building Products company with an attractive investment in a globally cost competitive aluminium business. It will also retain responsibility for contingent product liabilities.
The CSR brand will continue to be the cornerstone brand which provides the powerful endorsement of the market-leading portfolio of building products brands the business holds across Australia/New Zealand.
CSR's Sugar and Renewable Energy business will be launched with a refreshed corporate identity reflecting its strong heritage in the Australian, New Zealand and international sugar markets. It will retain the iconic CSR brand in Australia and Chelsea brand in New Zealand from its refining joint ventures.
The refreshed corporate identity will reflect the company's globally relevant sugar business with strongly emerging renewable energy operations in fuel ethanol and electricity cogeneration.
Board and Management
1) CSR Ltd
The Board of CSR Ltd will continue to be chaired by Ian Blackburne, who has been Chairman since 2003. CSR Ltd's Managing Director, Jerry Maycock, will retire from CSR Ltd upon the successful completion of the demerger, which is expected to be at the end of March 2010. Jerry will be succeeded by Rob Sindel, currently Executive General Manager of Lightweight Systems of CSR Ltd. Rob has been appointed as CEO, CSR Building Products in the interim.
Ian Blackburne said "The Board and Jerry have worked together on the restructuring opportunity and the long-term succession options in CSR since his appointment in 2007. Jerry has played an instrumental role in leadership development and in strengthening the individual businesses, during an extraordinarily challenging period, so that a restructuring can proceed. Together we believe that now is the right time for the leadership transition to begin."
"In appointing Rob Sindel, 44, as its future CEO, the Company engaged in a rigorous succession planning process in which internal candidates were assessed and benchmarked externally against international executives identified through an extensive global search. The Board is very pleased with the outcome we are announcing today.
"Rob is an experienced building products executive who has demonstrated a strong track record of delivering results in Australia with Pioneer and more recently with Hanson Plc in the UK. He has impressed us significantly with the way he has worked with the Lightweight Systems group in driving costs down, customer satisfaction up and developing a long-term strategy for CSR Building Products, working collaboratively with his colleagues on the leadership team.
Commenting on his new role, Rob Sindel said: "I am delighted to be offered the opportunity to lead CSR as it sets out on its new journey. The CSR Building Products Division has long had an enviable reputation in safety, operational and financial performance, which is a credit to the dedication and capability of its people.
"It is an exciting time to be part of this terrific organisation and I am looking forward to working with the CSR employees and our valued customers who make it all happen. CSR is an Australian icon with great breadth and diversity in its products, markets, geography and people and I look forward to creating a new organisation that builds upon these historic strengths."
The Board also announced that Shane Gannon, who will continue his role as CFO of CSR Ltd, will be appointed to the Board as an Executive Director of CSR Ltd with immediate effect.
"This decision reflects the very significant contribution Shane has made to CSR since he joined in 2008, and our strong endorsement of his central role in the leadership team," Dr Blackburne said.
2) Sugar and Renewable Energy
If the demerger proceeds, Richard Lee will be appointed as Chairman of the demerged Sugar and Renewable Energy business. Richard has a long and distinguished career in finance and investment banking and has significant experience in agricultural industries, including his roles as deputy chairman of Ridley Corporation and as chairman of long established sugar merchants and service provider, C. Czarnikow Limited in which CSR has a substantial shareholding. He also held senior executive roles in CSR Sugar previously. He has been on the CSR Board since 2005.
Ian Glasson, currently the CEO of CSR Sugar will be appointed to the role of CEO of the Sugar and Renewable Energy business. Ian brings extensive experience to this role and will continue to build on the strategic and operational improvements he has implemented within the Sugar business as it commences its new phase post the demerger.
"I welcome the opportunity to lead a talented and committed team right across our Sugar and Renewables businesses," said Ian Glasson. "Sugar is a natural source of energy for humans as well as providing a sustainable source of electricity and ethanol as a fuel. Hence, in addition to our heritage sugar milling and refining businesses, we have been building a more stable and growing earnings base from "better for you" sugar products and renewable energy and I look forward to building on our current strong market positions as we implement our growth strategies."
Ian Blackburne complimented current CSR Managing Director Jerry Maycock, who will oversee the transition into two more focused businesses.
"During his time as Managing Director of CSR, Jerry has been pivotal in driving a significant change program across CSR. Under his leadership, the businesses have been significantly strengthened through asset renewal, key acquisitions and restructuring to reposition them as stronger stand-alone entities post demerger."
Jerry Maycock said "we have two great leaders in Ian and Rob. I am delighted they have been chosen from within the ranks of our very strong executive leadership team. I will work with Ian and Rob and others to ensure an orderly transition as part of the demerger process."
Rob Sindel's and Ian Glasson's appointments as CEOs of the stand-alone companies are conditional on the demerger becoming effective. The key terms of their appointments will be released at that time.
Ian Blackburne concluded "it was important to establish the leadership of the proposed new entities now, so that they could work effectively to develop the two new organisations through the remaining due diligence period. More restructuring details will be presented to the market in early November."
"I will chair a Demerger Steering Committee including Jerry Maycock, Rob Sindel, Richard Lee and Ian Glasson for the remainder of the planning and approvals period.
"Assuming the Board finally concludes that a demerger is the best value opportunity for shareholders, we remain on track to complete the restructure by 31 March 2010."
24 September 2009
Martin Cole, CSR Investor Relations
Tel. (02) 9235 8053
Appendix – Biographical details on new Board and management appointments
Rob Sindel joined CSR as Executive General Manager of Lightweight Systems in April 2008 and in that role he was responsible for leading the operations of CSR's major brands such as GyprockTM Plasterboard, Bradford InsulationTM and HebelTMLightweight Concrete Products.
Rob was formerly the Managing Director of Civil Marine, a subsidiary of the global building materials company, Hanson, now part of the Heidelberg Cement Group. Civil Marine is a $228 million turnover, $60 million EBIT business with 8 sites and 250 direct employees, supplying slag cement and Calumite for the UK building industry. Prior to this role, Rob held the position of Commercial Trading Director for Hanson Aggregates, a $2 billion turnover, $260 million EBIT, 4,000 employee business involved in the production of aggregates, cement products, concrete, asphalt and building products. Prior to these two roles, Rob was with Pioneer Australia, where he worked for over 13 years.
Shane was appointed CFO of CSR Ltd on 14 July 2008. He has overall responsibility for the financial operations of CSR. He is a highly experienced financial professional, having held a number of senior executive roles at ASX listed companies across commercial and industrial sectors with his most recent position as Chief Financial Officer of Dyno Nobel Ltd.
Shane spent 10 years with the Lend Lease Group, undertaking senior financial roles in the property and financial services sectors. He has provided investment consulting and advisory services before moving to Novera Energy in 2002, initially as CFO and subsequently as CEO.
Ian was appointed CEO of CSR's Sugar division in April 2006, responsible for CSR's sugar operations across raw sugar, refining and renewable energy.
Previously Ian was Managing Director of Gresham Rabo Management Limited, where he ran the Food and Agribusiness private equity fund. Ian also has extensive food and agribusiness experience gained in Goodman Fielder in roles including Managing Director of Goodman Fielder Ingredients, serving in both Australia and the USA, and as General Manager of Leiner Davis Gelatin. In addition, Ian worked in the petroleum industry for sixteen years with Esso Australia and Exxon Corporation.
Richard joined the Board of CSR Ltd in 2005. He has had 19 years' experience in investment banking and the finance industry. He is a former chief executive officer of N M Rothschild Australia group. Prior to his investment banking career, he held a number of senior roles in CSR's Sugar division.
Richard has been chairman of Salmat Limited for seven years and is deputy chairman of Ridley Corporation Limited, where he has been a director for eight years. He has been a director of Newcrest Mining Limited since August 2007 and is also chairman of C.Czarnikow Limited and an independent director of Wesfarmers General Insurance Limited.