Mengniu Dairy (Group) Co Ltd has become the first mainland company known to have launched a global search for a group chief executive officer, who will have the title of president.

The company's recruitment advertisements began to appear this week in Business Week, a US magazine and the People's Daily, the largest circulation national newspaper on the mainland.

In a statement, Mengniu, which is the mainland's second largest dairy producer after Yili, said that the company was going through a major management "transfusion" after six years in business.

"The first stage of the rocket" that fired the company's growth in the past six years has expired and "fallen off," illustrated by the transfer of several senior executives to the "second line," the statement said.

Meanwhile, "the second stage (of the corporate rocket) has ignited," it said.

Niu Gensheng, founder of the company that is listed on the Hong Kong stock exchange, indicated in July his plan to retire from the post of chief executive at the end of the year, although he remain as group chairman.

The chief criteria set for the selection of the new chief executive is "global perspective," the company said. Having established its share in the domestic market, the company is "ready to step out into the world arena," it said. "An international company needs a president with a global perspective," the statement quoted the chairman as saying.

Zhang Wen, Mengniu's human resources director, said in a telephone interview, "The new president is expected to take up the post at the beginning of next year."

Despite the earlier hint, the company's global search surprised many stock analysts on the mainland and in Hong Kong. "It is unusual for a mainland company to consider appointing a foreigner as chief executive," said an analyst at a Hong Kong stockbrokerage firm.

But Mengniu's latest move was apparently welcomed by investors. The company's shares yesterday closed at HK$6.05 each, up nearly one percent, while the Hang Seng index, the most widely followed market indicator, dropped 84 points.

Mengniu has set an ambitious goal - it aims to be one of the top 20 dairy companies in the world by the year 2010.

"We aim to be a global company, and this move is to pave the way for our possible future development," said Zhang.

The candidates must meet at least two of the following requirements: a master's degree, 15-years work experience in the dairy industry, or a good understanding of the international market.

The application deadline is October 31.

In addition to the recruit advertisement, the company has also invited global consulting companies and head-hunting firms to help them find suitable candidates.

"It is good for Mengniu's future development," Chen Yu, an analyst from Beijing Orient Agri-Business Consultancy, told China Daily.

However, he worries about whether a foreign professional manager would be a good move for Mengniu's development.

"In the next few years, China will remain Mengniu's most important market," he said.

Director of Tung Tai Securities Kenny Tang said, "Hiring an experienced CEO would definitely enhance the company's level of corporate governance, which is beneficial to the long-term development of the company."

Shares of the company have jumped a total 26 percent from HK$5 to a high of HK$6.3 over the past three months.

Bank UBS is giving an even rosier projection for the company, setting the target price for the stock at HK$7.32 with a "Buy" rating.

(China Daily September 28, 2005)