---
title: "Mengniu's Lu Minfang: Finally Relieved"
description: "Last week, news that Lu Minfang's era at Mengniu Dairy had ended sent shockwaves through the dairy industry. Over the past eight years, Lu led the company with decisive action, driving it onto a fast-growth track. Although he didn't achieve the dual 100-billion-yuan targets for market value and sales simultaneously, he at least brought the company to the threshold of 100 billion. At this point, Lu's clean exit may well be a relief. During the industry's bottleneck period, dairy companies generally face growth challenges, and Mengniu needs a bold leader to break the deadlock. That pressure now falls on Gao Fei. Lu's last public appearance was a warm handshake with Gao at the March results meeting."
author: "陈晓京"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-10-15"
language: "en"
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---

# Mengniu's Lu Minfang: Finally Relieved

> Last week, news that Lu Minfang's era at Mengniu Dairy had ended sent shockwaves through the dairy industry. Over the past eight years, Lu led the company with decisive action, driving it onto a fast-growth track. Although he didn't achieve the dual 100-billion-yuan targets for market value and sales simultaneously, he at least brought the company to the threshold of 100 billion. At this point, Lu's clean exit may well be a relief. During the industry's bottleneck period, dairy companies generally face growth challenges, and Mengniu needs a bold leader to break the deadlock. That pressure now falls on Gao Fei. Lu's last public appearance was a warm handshake with Gao at the March results meeting.

Last week, the news exploded in the dairy industry: the Lu Minfang era at Mengniu Dairy had ended. Over the past eight years, Lu Minfang acted with vigor and decisiveness, putting the company on a fast-growth track. Although he didn't achieve the dual 100-billion-yuan targets for market value and sales simultaneously, he at least brought the company to the threshold of 100 billion. At this point, Lu's clean exit may well be a relief. During the industry's bottleneck period, dairy companies generally face growth challenges, and **Mengniu needs a bold leader to break the deadlock.** That pressure now falls on Gao Fei. Lu's last public appearance was a warm handshake with Gao at the March results meeting. At that time, few knew that the short-statured Lu Minfang had already prepared to step down. He left quietly, hiding his name and deeds.

**A Clean Exit**
After serving Mengniu Dairy for eight years, 55-year-old Lu Minfang chose a complete exit. Last Thursday evening, Mengniu Dairy (02319.HK) announced that Lu Minfang resigned from his positions as executive director and vice chairman to devote himself to personal affairs and family. This clean exit was not without warning. At the FY2023 results meeting held in March this year, Lu announced his resignation as president, freeing himself from daily company affairs. That day, he warmly shook hands with his successor, Gao Fei, making his retreat behind the scenes public.

Lu may have long planned his departure from Mengniu. According to filings with the Stock Exchange of Hong Kong, on November 3, 2023, Lu sold 495,000 shares of Mengniu Dairy at an average price of HK$26.33 per share, totaling approximately HK$13.0334 million. After the transaction, his stake fell from 0.61% to 0.59%. Whether from a personal perspective or for the company's benefit, Lu's transition from resigning as president to a complete exit, with a six-month interval, was relatively prudent. Against the backdrop of a weak dairy consumer market, this approach minimized the impact of key executive changes on the company and allowed ample time for internal transition.

Since its founding in 1999, Mengniu Dairy's presidents have generally served no more than two terms (each term being three years). Before Lu, Niu Gensheng, Yang Wenjun, and Sun Yiping all followed this pattern. Yang Wenjun, one of Mengniu's ten founding veterans, served two full terms before leaving; the shortest tenure was Sun Yiping from the COFCO faction, who resigned voluntarily after just four years. Sun was the first president "arranged" by the COFCO faction, and during her tenure, the company's performance gap with Yili widened, forcing COFCO to change leadership again. At that time, Lu Minfang, who was serving as president of Yashili Group under Mengniu Dairy, came into COFCO's view.

**Lu graduated from Fudan University in his early years and held executive positions at Johnson & Johnson, Danone, and Dumex, making him a dairy industry veteran.** With his rich industry experience, he became a satisfactory candidate for all shareholders of Mengniu. In September 2016, at the age of 46, Lu Minfang was appointed as Mengniu Dairy's fourth president at a critical moment.

**The Wolfish Era**
Mengniu's founder, Niu Gensheng, once proposed: **Enterprises either grow at high speed or are destroyed at high speed.** Driven by this so-called "spaceship law," Mengniu developed rapidly, gradually revealing its wolfish genes. Niu Gensheng initiated Mengniu's wolfish era, but his successors failed to carry it forward. Yang Wenjun was decisive and low-key; Sun Yiping focused on internationalization and digitalization. Only Lu Minfang, with his gentle appearance but fierce actions, publicly advocated unleashing Mengniu's wolfish culture and implemented iron-fisted reforms.

Upon taking office, he immediately began restructuring the organization. Starting in December 2016, he adjusted the company structure to a category-based business unit system, creating four major business units: ambient, low-temperature, milk powder, and ice cream, later adding cheese and fresh milk business units. This changed the previous situation where major decisions were concentrated in the CEO alone. This restructuring involved nearly 40,000 employees across supply chain, sales, and marketing functions. Under Lu's iron fist, the reform was completed by the end of January 2017.

At that time, few may have known that Lu was playing a bigger game. When Mengniu's capital moves came frequently, it surprised many. **In 2017, the company increased its stake in China Modern Dairy by HK$1.873 billion, becoming the controlling shareholder; the following year, it acquired a 51% stake in Inner Mongolia Shengmu Hi-Tech under China Shengmu; in 2021, the company became the controlling shareholder of cheese leader Miaokeland (600882.SH), among others.** Thanks to his early experience in multinational companies, Lu had a more international vision. During his tenure, he promoted acquisitions of Australian raw milk supplier Burra Foods, infant formula brand Bellamy's, and Indonesia's largest ice cream brand Aice, and also led projects such as the Yashili factory in New Zealand and the Yakult C factory in Indonesia.

After achieving layout in the industrial chain and business segments, the company made great efforts in product categories. In addition to continuing to support the major product Telunsu, it launched the high-end fresh milk brand "Shirley Fresh" to gain a share in this segment.

**Leaving Regrets**
At 55, Lu Minfang is in his prime, with rich practical experience and keen industry insight. His exit from Mengniu inevitably brings some regrets. **In 2017, Lu set the goal of achieving dual 100-billion-yuan targets by 2020** — with annual sales and total market value both reaching 100 billion yuan. This led to a series of measures, including large-scale mergers and acquisitions, to drive scale growth. Although he viewed this as a strategic drive, it still played a significant role in enhancing the company's scale. After implementing these M&A deals, the company completed its industrial chain layout covering upstream pastures, midstream milk powder, cheese, and yogurt, becoming the second-largest dairy company in China.

In 2020, Lu did not see the harvest of dual 100-billion targets; only the single target of total market value exceeding 100 billion was achieved. At the end of that year, he unveiled a new plan: to create a new Mengniu within five years. Abandoning the pursuit of 100-billion scale was Lu's forward-looking recognition of the industry. He believed the company should achieve performance goals through higher-quality and more valuable development. He painted a picture of Mengniu in five years (2025): First-Choice, Technology, International, Spirit, Responsibility.

During Lu's eight-year tenure, Mengniu's revenue and net profit attributable to the parent company grew in all fiscal years except 2020, which was affected by the divestiture of Junlebao. Even so, the gap with Yili continued to widen. In March this year, when Lu resigned as president, he stated that under his governance, **the company's M&A business operations needed improvement**, and the company's expansion was not decisive enough, especially the market ambition for the new category Shirley Fresh was far from sufficient, leading to conservative overall resource allocation. Nevertheless, he laid a good foundation for his successor, such as establishing a long-term growth framework.

Even so, the new leader of Mengniu Dairy, Gao Fei, still has a heavy burden. In the first half of this year, the company faced a performance crisis, with revenue and net profit attributable to the parent company declining 12.61% and 19.03% year-on-year, respectively, and all four major businesses—liquid milk, ice cream, milk powder, and cheese—saw shrinking revenue. During the industry's bottleneck period, the entire industry faces challenges, and Mengniu Dairy urgently needs a "bold leader" to break the deadlock. Will Gao Fei, who successfully managed Telunsu, be the chosen one? That is no longer related to Lu Minfang.


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