A2 Milk chairman David Hearn says incoming chief executive David Bortolussi has the experience and deep knowledge of China, combined with crucial brand and manufacturing knowhow, to continue a2’s growth in the company’s biggest market.
Mr Bortolussi’s appointment comes after a six month global search and after the infant formula and milk company approached him for the role.
He has been lured from the US-owned apparel company HanesBrands after 11 years in the industry, in a lucrative deal that will see him take a pay packet of $1.75 million a year.
“David took a business (Pacific Brands), with a manufacturing business base in Australia, and converted that to a Chinese manufacturing base. That required the identification of partners, the building of relationships, setting up of contracts, and very importantly, the long-term nature of those relationships has come to fruit,” Mr Hearn said.
“David understands the Chinese business culture, understands the way they do business, understands the importance of partnerships and relationships…and it’s those qualities that transfer into our business,” he said.
Mr Bortolussi is currently group president, international innerwear at HanesBrands, the underwear and activewear business. In 2016 Hanes bought Pacific Brands, owner of the famous Bonds brand.
“He took a business (Pacific Brands) that was close to moribund really and saw that the intrinsic value in that company, which had to be exploited, was in its brands. And (he) took those brands and enlivened them and that drove ultimately the retail strategy, and that’s what attracted Hanes,” Mr Hearn said.
Mr Bortolussi, who is 51 and based in Melbourne, will remain with Hanes until next February, but under his contract with a2 will be based in Sydney.
Before joining Pacific Brands Mr Bortolussi was chief strategy officer at Foster’s Group and was heavily involved in the process that demerged Foster’s into the separate companies of Treasury Wine and CUB.
Mr Bortolussi was unavailable for interview but in a statement said he was thrilled to join a2 “and to be part of the next phase of growth”. He will succeed interim CEO Geoffrey Babidge, who returned to the role late last year after the departure of Jayne Hrdlicka.
Mr Bortolussi will face high expectations as the head of the market darling, with a2 shares up about 35 per cent since the start of 2020. In April a2 said its March quarter revenue had beaten expectations, and upgraded full-year profit margin guidance.
Andrew Mitchell, senior portfolio manager at a2 investor Ophir Asset Management, said Mr Bortolussi appeared to be a safe choice.
“From David’s background it appears the board has chosen a CEO with proven skills in being able to execute to a strategy centred on China,” he said.
During an investor call Bank of America analyst David Errington said Mr Bortolussi was “a very very energetic, highly capable, top CEO”.
A2 shares were down 0.9% to $18.91 shortly after 2.30pm.