Outflow of Personnel in Kernel: Top-Management Leaves the Company

In the past two weeks, Kernel was the news topic in the agrarian market. Thus, the decision to sell 7 agro-enterprises to Vitaliy Khomutynnik, the odious politician and businessman, caused the recent resonance in the media. But the key event still lies in the non-public field. As it was learned by Latifundist.com, a significant amount of top management leaves the company for various reasons. We received this information from our sources in the company and in the market, but many informers asked not to mention their names. Official information about the personnel will be announced in the near future. We share insider details about the game of thrones in Kernel.

Management thinning

Two weeks ago Kernel published the annual report, where Yevgeny Osipov, the head of the Agribusiness direction, was announced as CEO of the holding.

Yevgeny Osipov, CEO of Kernel

"In his new role, Yevgeny Osipov will manage the operating activities and will be responsible for the strategy implementation," Andrei Verevskiy, the founder of Kernel, the head of the board of directors, introduced the new CEO of the company.

Andrei Verevskiy, founder of Kernel, head of the board of directors

This news was quite a surprise for the agrarian business environment. For a long time this position remained vacant, but in the market Konstantin Litvinskiy, the operational director, was considered as the actual CEO.

Litvinskiy has worked in Kernel for 12 years and many market participants associated the main operational success of the company during this period with his name. He came to the holding in November 2005 from Ramburs, and immediately headed the trading direction.

Konstantin Litvinskiy, operational director of Kernel

"This person makes decisions on all issues in Ukraine, and for the market he was the second person after the shareholder. But Andrei Verevskii is in Geneva, and Konstantin is in Ukraine, so all communications are conducted with him," anonymously says the top manager of one of the international trading companies.

After Osipov had occupied the post of "the first after the shareholder", a real personnel revolution began in Kernel. One by one, the heads of the key directions began to leave the company. As Latifundist.com learned, Vitalii Stavnichuk (also one of the long-term employees of the company) the director of the department of production, research and development of agribusiness, and Aleksandr Mashchenko, the head of the logistics department, left their posts.

Vitalii Stavnichuk, the director of the department of production, research and development of agribusiness
Significant personnel changes occurred in the company's port division. So, Sergei Sinitsa, CEO of TransbulkTerminal, who had come from the TIS terminals, was fired and left along with a number of employees.

Igor Chikin

The main reason for the dismissal of Vitalii Stavnichuk was the appointment of Igor Chikin as head of Agribusiness. Some positions in the company were quickly occupied by successors.

Thus, Igor Chikin, the head of the Western regional office, occupied the vacant position after Osipov's promotion. Nikolai Miroshnichenko, deputy commercial agent of Agribusiness, headed the logistics direction.

"Igor Chikin was successful in agribusiness; he headed one of the most powerful clusters. But for a long time Vitalii Stavnichuk was responsible for technology and production and defined the strategy and largely set the pace of work. Apparently, in the new configuration, Vitalii does not know how he can realize his potential," our source in the company commented on the situation.

Now it is likely that Konstantin Litvinskiy will leave the company.

"I think that Litvinskiy has an option to stay, but it is unlikely that he will play along with changes that he does not believe in," the source in the company continues.

According to the latest information, Mikhail Travetskiy, the head of the livestock service, has also left the company’s team of top managers.

Soon, an exclusive interview with Mikhail about the reasons for leaving and new projects will be available on Latifundist.com.

Why?

Before analyzing the logic of such actions in Kernel, it is worth starting with the internal company’s organization. It largely explains the personnel changes.

In the previous configuration, Kernel was organizationally comprised of a number of separate businesses: agribusiness, trading, processing plants and a logistics division in charge of elevators, transshipment, and transportation. Each of them was headed by its director. Despite the fact that they are all "in the same boat", the businesses compete with each other in a constant competitive race.

In fact, these directions have always been autonomous. Sometimes the working conflicts between businesses happened. Everyone did his/her best to give the maximum result. Now one of the main goals of the company is to deploy all efforts and merge sectors into one business, getting a common result from the chain, even if some link fails.

"Earlier, when one link sagged, it became in a defensive position in order not to collapse completely, thereby blocking part of the processes from other links. Such decentralization, on the one hand, allowed maintaining a balance, but on the other hand, it hampered the development of the company to a certain extent," said another source in Kernel.

Decision-making took place collegially. The composition of the sectoral committees (trade, investment, budgetary) in fact was represented by the same people — the directors of companies. Only the supervisory board was above the committees.

For a long time competition within the business justified itself. But on some issues the business participants did not come to a common opinion thus it demanded arbitration at a higher level from the head of the board of directors.

It should be noted that these committees consistently included two persons — Konstantin Litvinskiy and Lesya Litvinskaya, his wife, who previously headed the logistics division. This practice lasted for many years, in many respects the Litvinskiy family was given carte blanche.

Lesya Litvinskaya, former logistics director at Kernel

But this continued until June this year. Then it was decided to release Lesya Litvinskaya from the duties of the director of the logistics division and accordingly the right to vote in the committees.

What is next?

The choice of Osipov as a CEO is probably motivated by the high results of the direction of Agribusiness. In fact, he won a competitive race with his colleagues.

CEO of one of Kernel's partner companies, who is familiar with the personnel reshuffle, sees in the new director the opportunity for the company to give a new round of development.

"Many top-managers have been working in the company for more than ten years, and have no longer been the bearers of progress, sometimes working by inertia. In turn, Osipov is young and dynamic, and he can give new breath to the company. In addition, he thinks strategically, in this he is like Andrei Verevskiy," he said.

In this sense, it is much easier for the new head to work with his team than to seek common ground with the "old guard".

Almost all our sources note that despite the personnel changes, the mechanism of the company is so harmoniously adjusted that fundamental changes and failures should not occur. Although, the "revolution" itself is in many respects a decision conditioned by the business intuition and strategic vision of Andrei Verevskiy.

On the other hand, the risk factor is that non-profile specialists were appointed to profile positions. After all, being able to grow does not mean being able to transport or realize. According to the expert opinion, the personnel changes can cost Kernel losses of USD 0.5 per ton of grain.

We will see the results of these changes for the holding company in the near future. The fate of Kernel, and also the entire agrarian market depends on the personnel reshuffle.

Konstantin Tkachenko, Latifundist.com

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