Company ProfileHighlights
Kernel Holding S.A. is one of the leading agricultural companies in the Black Sea region. Kernel Holding S.A. is a public limited company incorporated under the laws of Luxembourg. Production assets, infrastructure and logistics of the holding are located on the territory of Ukraine. Furthermore, there are plants and terminals in Russia. Several controlling enterprises and traders that are members of the holding, are registered in Netherlands, Switzerland, British Virgin Islands, Cyprus. In November 2007 Kernel was listed on the Warsaw Stock Exchange which resulted in offering 16 671 000 new shares and attracting USD 160 MLN. During 2008-2011 the company placed SPO worth USD 304 MLN. (see Figure 1). Andrii Verevskiy, owner of Namsen Ltd., is a founder of the company. The structure of shareholders is represented in Figure 2.
Main activities of Kernel Holding S.A. are represented by 3 businesses that generated USD 2 157.4 MLN revenue in 2012 FY (see Figures 3 and 4). The holding formed a complete production chain for its key industry – bulk oil. Kernel’s essential business segments are as follows:
2A. Sunflower oil production. Own production and purchase of sunflower (6% and 94% correspondingly) forms a raw material base for oil production (bulk oil and bottled oil) that is carried out by 7 plants in Ukraine and 3 plants in Russia with overall crushing capacities of 3.0 MMY per annum. The holding produces 7.2% of the world’s sunflower oil output. Furthermore, the company produces one third of Ukrainian consumption of bottled oil under the three brands (Chumak Zolota, Schedryi Dar, Stozhar) and private labels 2B. Sugar production accompanied by further domestic sales, is provided by 4 plants that were acquired in 2011. Kernel’s market share in Ukraine equals to 7%. Nevertheless Kernel’s low crop yield of sugar beets (17.4% below the country’s average) and small profitability comparing to other business segments explain the company’s current attempts to sell sugar production. 3А. Silos and logistics. Kernel has the largest private elevator network with a total capacity of 2.5 MMT (7.1% of the country’s capacities). Elevators are located next to railroads and are used for own needs and for farmers (2/3 and 1/3 of the volume of services correspondingly). In addition, Kernel possesses 2 terminals in Ukraine and newly bought one in Russia in 2012. The terminals with annual capacities of 6.0 MMT are situated on the Black Sea and satisfy own export needs of grains and sunflower oil.
The company’s strategy stipulates the following expansion of its activities, namely: extensive expansion – growth of land bank up to 400-450 ths. ha accompanied by building and acquiring new plants, elevators and terminals (planned CapEx in Ukraine amounts to USD 300-350 MLN, in Russia – USD 350-400 MLN); intensive expansion – implementation of modern technologies and abidance by operational discipline to provide efficiency of each element of the production chain. Kernel’s social responsibility is aimed at: 1. Environment protection as a result of using mini-till and no-till farming technology to reduce land erosion and to preserve land humidity; generating green energy from sunflower husks (83 MLN m3 of natural gas was saved in FY2012); using present-day harvesters to save 7-10% of sunflower seed; waste water treatment during storage and transshipment. 2. Support to agricultural regions where Kernel operates by assisting schools and local communities, creating new workplaces (1050 workplaces in FY2012). Direct donations stood at USD 0.6 MLN in FY2012. 3. Employer’s responsibility: Kernel employs about 17000 people and conduct different staff training programs. Thus, USD 173 MLN were invested in training in FY2012.
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