Kernel Holding

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Kernel Holding SA
legal form Spółka Akcyjna
ISIN LU0327357389
founding July 15, 2005
Seat Luxembourg , LuxembourgLuxembourgLuxembourg 
management Yevhen Osypov ( CEO )
Andrij Werewskyj ( Chairman of the Board )
Number of employees 13,397
sales 4.0 billion dollars (3.3 billion euros )
Branch Agriculture
Website https://www.kernel.ua/
As of June 30, 2019

Kernel Holding is a Ukrainian agricultural company . The company's registered office is formally in Luxembourg ; however, operational management is from Kiev . The company is the world's largest producer and exporter of sunflower oil and the largest grain producer and grain exporter in Ukraine.

The company's activities extend along the entire agricultural value chain ; In addition to the cultivation of grain and oilseeds and the operation of oil mills, they also include agricultural logistics processes (e.g. operation of silos for grain storage , grain wagons and export terminals for transport by bulk freighters ).

The company's share has been traded on the Warsaw Stock Exchange since November 2007 and is included in its WIG30 leading index .

The company's founder , main shareholder and Chairman of the Board Andrij Werewskyj ( Андрій Веревський ) was initially a member of the Ukrainian Parliament for the All-Ukrainian Association "Fatherland" and later for the Party of Regions and was a member of the Agricultural Committee there several times. In 2013, he lost his mandate through an administrative court decision , as his position as a member of parliament while he was also a manager for Kernel was not compatible with the constitution . Werewskyj's name also appears in the Paradise Papers .

history

prehistory

Andrij Werewskyj has been running an agricultural trading company in Poltava in central Ukraine since 1995, which mainly dealt with grain exports.

In 1998 the first grain elevator was purchased .

From 2001, agricultural production began with the establishment of companies in Poltava , Odessa , and Cherkassy oblasts ; at the same time, other granaries were acquired in Mykolaiv , Kirovohrad , Odessa and Cherkassy.

In 2002, the company acquired an oil mill in Poltava, which enabled it to produce sunflower oil for the first time .

In 2003, the previously separately managed companies were merged into a corporate structure, the Kernel Group .

In 2004, the company acquired the rights to the sunflower oil brand Schedry Dar and a bottling plant in Luhansk Oblast in eastern Ukraine, making the company active in the end customer market for the first time. Kernel also acquired additional grain silos and expanded within Ukraine by opening regional branches.

Company formation

On July 15, 2005, Kernel Holding SA , today's parent company, was entered in the Registre du commerce et des sociétés , the Luxembourg commercial register .

The company's international expansion began in 2005 with the opening of a sales office for the Schedry Dar brand in Moscow . At the same time, the company entered the market in other countries of the former Soviet Union. The oil mill in Poltava has also been expanded to include a bottling plant with a daily capacity of 350 tons of sunflower oil.

In 2006, Kernel acquired the assets of the competitor Eurotek oil mills in Vovchansk and Prykolotne , 13 silos with a total capacity of 650,000 tonnes and 22,000 hectares (leased) farmland. This made Kernel the largest agricultural company in Ukraine.

initial public offering

In November 2007 the company went public on the Warsaw Stock Exchange . During the initial placement, 22.76 million shares (including 16.7 million new shares ) were put into circulation at an issue price of US $ 9.77. The issue proceeds totaled US $ 220 million. After the IPO of Astarta Holding SA , a sugar and grain producer in 2006, Kernel is the second Ukrainian company to be listed on the GPW.

expansion

In 2008, the company acquired the Transbulk Terminal, the second largest port terminal in Ukraine in the port of Chornomorsk, and also increased its agricultural area to 80,000 hectares. The financing took place in part through a capital increase .

In 2010 Kernel took over 94% of the shares of competitor Allseeds .

In 2011 the company acquired another oil mill in the immediate vicinity of the grain terminal in Chornomorsk and was also able to expand its land holdings to 230,000 hectares. In the same year, the Kernel also acquired the Russian company Russian Oils , which was the Group's first foreign company in the manufacturing sector. By taking over the majority of shares in Ukrros , the country's third largest sugar producer at the time , Kernel also acquired additional arable land and grain stores as well as four sugar refineries with a total processing capacity of 22,000 tons of sugar beet per day.

In 2012, the company set up a joint venture with competitor Glencore to operate a grain terminal in the deep-water port of Taman in Russia. The terminal has an export capacity of 3 million tons per year. With the acquisition of Druzhba Nova in 2013, the Group's land holdings grew to 400,000 hectares. In addition, the company decided to exit the sugar business. The refinery in Chortkiv was sold to Pfeifer & Langen in 2013 , the one in Novoorschyzke to Astarta ; the shutdown of the remaining plants in Sloboschanske ( Tsukrove LLC ) and in Cherkassy Oblast ( Palmirsky sugar refinery LLC ) followed by 2016.

In 2016, Kernel acquired another oil mill in Kirovohrad Oblast with an annual processing capacity of 560,000 tons of sunflower seeds. At the same time, the company sold two less profitable oil mills in Ust-Labinsk and Georgievsk in southern Russia, after the oil mill in Nevinnomyssk had already been sold in 2014 . The company acquired these systems as part of the takeover of Russian Oils in 2011.

In 2017, Kernel acquired Ukrainian Agrarian Investments (UAI) and Agro Invest Ukraine . The company's agricultural production areas grew to a total of over 600,000 hectares.

Since the liberalization of the Ukrainian rail market in 2018, Kernel has built up its own fleet of grain wagons for transporting goods by rail. In 2018, the company also announced that it intends to put the TransGrain Terminal , another grain terminal , into operation in the port of Chornomorsk by the end of 2020 , with an annual export capacity of 4 million tons. In the same year it was also revealed that investigators from the Ukrainian domestic secret service SBU had confiscated documents from the company, alleging that Kernel was involved in illegal money transfers abroad in order to avoid sales taxes and customs duties.

In March 2020, it was announced that the company had sold its stake in the grain terminal in the port of Taman to the Russian VTB Group after Kernel had already sold its export quota of 1.8 million tons to a third-party company for 7.8 million US dollars in 2018 had transferred. The Russian government had previously imposed economic sanctions on the company . In addition to the company itself, two of the company's executives, CEO Ievgen Osypov and main shareholder and Chairman of the Board Andrii Verevskyi, also belonged to the list of sanctioned companies and people. With the sale of the stake in the Taman Terminal, the Group's complete withdrawal from the Russian market was completed.

Business areas

The business model of the strongly vertically integrated group is aligned along three segments .

Agricultural agriculture

With a total cultivation area of ​​530,000 hectares, Kernel is the largest agricultural producer in Ukraine. The cultivated arable land is mainly located in areas with high occurrences of fertile black earth in western, central and northern Ukraine.

Around 45% of the arable land is used for growing maize ; Sunflowers account for 27% and soy for 5% . Other types of grain , e.g. winter wheat, are grown on the remaining areas .

Only about a quarter of the arable land in Ukraine is owned by the state, municipalities or private companies. The remaining 75% are spread over small fields with sizes between 4 and 10 hectares that are owned by private individuals. These had been allocated the country after the collapse of the Soviet Union . Since 2001 there has been a moratorium in Ukraine (which will continue until autumn 2020) , which severely restricts the sale of arable land. Due to this fact, most of the company's arable land is leased, with the contractual option in each case of purchasing the arable land in the event that the moratorium is no longer applicable. The company's leasers are private individuals for 89% of the land and the Ukrainian state for 11%.

The company only uses non- genetically modified seeds , which mainly come from their own cultivation.

Kernel has five research and development centers with a total of 1,500 test fields for developing and testing new agricultural technologies and production processes.

The company also has its own facilities for the production of ammonium nitrate-urea solution , a fertilizer that is often used in agriculture .

Processing of oil seeds

With a processing capacity of 3.5 million tons of sunflower seeds per year, the company is the world's largest manufacturer of sunflower oil ; 1.6 million tons of oil were sold in the 2019 financial year.

Kernel operates seven of its own oil mills in the Ukraine in Poltava , Vovchansk , Prykolotne , Prydniprovskyi, Kropywnyzkyj , Bandurka and Tschornomorsk and also uses the Ellada oil mill (not part of the group) in Kropywnyzkyj.

The oilseeds produced in the Group's arable farming segment account for around 13% of the total volume processed; the remaining 87% come from non-group farms.

During processing, the seed pods are first separated from the actual sunflower seeds. The separated pods are either used energetically as biomass (electricity or process heat) or pelletized and sold. The kernels are then ground and cold-pressed , whereby on the one hand sunflower oil is produced and on the other hand (de-oiled) sunflower seed meal remains as a pressing residue. Hot pressing can also be used to increase the yield; however, the oil produced in this way is of lesser quality.

The flour remaining after pressing is used as protein-rich feed in pig , cattle and poultry farming . The resulting crude oil is either sold directly to processing companies or is first refined and then bottled for sale.

About 43% of the bottled oil is sold within the country under the brand names Chumak , Schedryi Dar and Stozhar , among others . The remaining 57% is exported - customers include international retail chains such as METRO , Auchan , Walmart and Maxima .

Since 2019, the company has been expanding all oil mills with the exception of those in Prykolotne to include biomass cogeneration plants for direct energetic utilization of the seed pods that occur in the production process; full commissioning is scheduled for 2021. The plant in Kropyvnytskyi has had such a facility since 2009 with an installed turbine output of 1.6 MW, which feeds electricity into the national power grid.

Kernel intends to commission another oil mill in Starokostjantyniw in western Ukraine with a processing capacity of 1 million tons of sunflower seeds per year by early 2021 , which should also be suitable for processing soybeans and rapeseed .

Infrastructure and trade

export

The company is the largest grain exporter in Ukraine . In addition to trading in grain and oil produced in-house, the company exports the products of over 4,000 agricultural producers. In the 2019 financial year, exports totaled 6.1 million tons of grain; this corresponds to 12% of the country's total grain exports.

The largest export markets are the countries of the European Union (58% of total exports), Asia (21%) and countries in the Middle East (14%), followed by Africa (6%) and other markets (1%).

The largest export volume is accounted for by corn (67%), followed by wheat (26%), barley and other grains.

Silos

Kernel operates the country's largest private network of grain silos . These are used to clean, dry and store the harvested grain. The company's 34 silos have a total capacity of 2.5 million tons; The annual amount of grain stored is higher, however, as different grains can be stored in the same silos, the times of which are different for harvesting : The storage of wheat typically begins in July; that of maize begins much later and can last until December.

Shipping

For grain export by bulk carrier , the company owns the TransBulk bulk cargo terminal in the deep water port of Chornomorsk with an annual loading capacity of 4.8 million tons. In the 2019 financial year, a total of 4.6 million tons of goods were shipped , 4.2 million tons of which were grain; the rest was made up of sunflower oil and sunflower seed flour .

Until 2019, Kernel also owned a smaller export terminal in the port of Mykolaiv , which was used exclusively for the export of sunflower seed flour.

The company has also had a 50% stake in a grain terminal in Taman , Russia, as part of a joint venture with Glencore since 2012 . Since giving up its own trading activities in Russia in 2017, the company had initially transferred its export quota to a third-party company and finally sold its stake to the Russian VTB Group in 2020 .

The company also intends to open a second grain terminal, the TransGrainTerminal, in the port of Chornomorsk by the end of 2020 in order to increase the capacity of ship exports by 4 million tons per year.

Rail transport

Freight trains are used to transport the grain temporarily stored in silos (both in-house and third-party) to the export terminals in the ports.

Since the deregulation of the railway market in Ukraine in 2018, the company has also operated a fleet of grain wagons. Through the purchase of 500 cars brand new in 2018 and the acquisition of specialized grain transport railway undertaking RTK Ukraine for 64 million US dollars in 2019, under which further 2,949 cars to fleet arrived the company was kernel the largest private operator of Grain wagons in Ukraine.

Group structure

The Kernel Holding SA holds a parent company investments in several subsidiaries, particularly in Ukraine.

Group structure of Kernel Holding SA
as of June 30, 2019
society Seat of the company Field of activity Participation
Jeste Sarl Luxembourg Holding 100%
Inerco Trade SA Switzerland Trade with sunflower oil , sunflower meal and corn 100%
Restomon Ltd British Virgin Islands Trade in sunflower oil, sunflower meal and grain 100%
Kernel Trade LLC Ukraine Trade in sunflower oil, sunflower meal and grain 100%
Avere Commodities SA Switzerland Trade in sunflower oil, sunflower meal and grain 60%
Ukragroinvest LLC Ukraine Trade in sunflower oil, sunflower meal and grain 100%
Poltava OEP PJSC Ukraine Oil mill ; Production of sunflower oil and sunflower meal 99.7%
Bandurka OEP LLC Ukraine Oil mill; Production of sunflower oil and sunflower meal 100%
Vovchansk OEP PJSC Ukraine Oil mill; Production of sunflower oil and sunflower meal 99.4%
Prykolotnoe OEP LLC Ukraine Oil mill; Production of sunflower oil and sunflower meal 100%
Kropyvnytskyi OEP PJSC Ukraine Oil mill; Production of sunflower oil and sunflower meal 99.2%
BSI LLC Ukraine Oil mill; Production of sunflower oil and sunflower meal 100%
Prydniprovskyi OEP LLC Ukraine Oil mill; Production of sunflower oil and sunflower meal 100%
Estron Corporation Ltd Cyprus Transport logistics 100%
Poltava HPP PJSC Ukraine Cleaning, drying and storage of grain and oilseeds 94%
Kononivsky Elevator LLC Ukraine Cleaning, drying and storage of grain and oilseeds 100%
Agro Logistics Ukraine LLC Ukraine Cleaning, drying and storage of grain and oilseeds 100%
Bilovodskyi KHP PJSC Ukraine Cleaning, drying and storage of grain and oilseeds 91.12%
Hliborob LLC Ukraine Agriculture ; Cultivation of corn , wheat , soybeans , sunflowers , rapeseed , fodder crops , peas and barley 100%
Prydniprovskyi Kray ALLC Ukraine Agriculture; Cultivation of corn, wheat, soybeans, sunflowers, rapeseed, fodder crops, peas and barley 100%
Enselco Agro LLC Ukraine Agriculture; Cultivation of corn, wheat, soybeans, sunflowers, rapeseed, fodder crops, peas and barley 100%
Druzhba-Nova ALLC Ukraine Agriculture; Cultivation of corn, wheat, soybeans, sunflowers, rapeseed, fodder crops, peas and barley 100%
Druzhba 6 PE Ukraine Agriculture; Cultivation of corn, wheat, soybeans, sunflowers, rapeseed, fodder crops, peas and barley 100%
AF Semerenky LLC Ukraine Agriculture; Cultivation of corn, wheat, soybeans, sunflowers, rapeseed, fodder crops, peas and barley 100%
Hovtva ALLC Ukraine Agriculture; Cultivation of corn, wheat, soybeans, sunflowers, rapeseed, fodder crops, peas and barley 100%

Shareholder structure

The issued capital of the company amounts to 481,900,000 US dollars and is divided into 81,941,230 individual shares (d. E. Shares without nominal value ).

Shareholder structure as of June 30, 2019
shareholder Number of shares held Share of voting rights
Andrii Verevskyi (indirectly through Namsen LLC ) 32,716,775 39.93%
Cascade Investment Fund 5,397,453 6.59%
Julius Baer Group 5,098,297 6.22%
Free float 38.728.705 47.26%

Individual evidence

  1. ↑ Management. Retrieved March 25, 2020 (English).
  2. ^ Board of Directors and Corporate Governance. Retrieved March 25, 2020 (English).
  3. ↑ a b c d e f g h i j k l m n o p q r s t u v w x y z aa ab ac ad ae Kernel Holding SA ANNUAL REPORT For the year ended 30 June 2019 (PDF; 6, 0 MB) September 30, 2019, accessed on March 25, 2020 .
  4. ↑ a b Uchwała No. 929/2007. November 21, 2007, accessed March 25, 2020 (Polish).
  5. ↑ WIG30. Retrieved April 12, 2020 (Polish).
  6. ↑ Веревський Андрій Михайлович - Посади протягом скликання. Retrieved April 12, 2020 (Ukrainian).
  7. ↑ Народний депутат України VI скликання. Retrieved April 12, 2020 (Ukrainian).
  8. ↑ Веревський Андрій Михайлович - Посади протягом скликання. Retrieved April 12, 2020 (Ukrainian).
  9. ↑ Court strips lawmaker Verevsky of his seat in parliament. March 5, 2013, accessed April 12, 2020 .
  10. ↑ ВАСУ ПОЗБАВИВ РЕГІОНАЛА МАНДАТА. March 5, 2013, accessed April 12, 2020 (Ukrainian).
  11. ↑ OFFSHORE LEAKS DATABASE. Retrieved April 12, 2020 (English).
  12. ^ Documents in Paradise Papers expose schemes of wealthy elite. November 10, 2017, accessed April 12, 2020 .
  13. ↑ a b c d e f g h i j History - Kernel. Retrieved April 12, 2020 (English).
  14. ^ Igor Eros: Sunflower oil deal expected to shake up market. November 2, 2006, accessed April 12, 2020 .
  15. ↑ Lviv-based Evrotek plans to create branch in Russia. February 15, 2016, accessed April 12, 2020 .
  16. ↑ Dariya Orlova: Ukraine's kernel raises $ 220m in Warsaw IPO. November 21, 2007, accessed April 12, 2020 .
  17. ↑ a b Pavel Polityuk: Sunoil firm buys large Ukraine grain terminal. July 9, 2008, accessed March 28, 2020 .
  18. ↑ Ukraine: Kernel announced about purchasing of 94% of Allseeds company shares. June 29, 2010, accessed April 12, 2020 .
  19. ↑ Ukraine's Kernel outlays $ 60 million for Russian Oils. August 16, 2011, accessed April 12, 2020 .
  20. ↑ Kernel closes Russian Oils acquisition. September 22, 2011, accessed April 12, 2020 .
  21. ↑ Top 10 M&A Deals in 2011. May 13, 2011, accessed on April 12, 2020 (English).
  22. ↑ Kernel in talks on acquisitions of agribusinesses. March 31, 2011, accessed April 12, 2020 .
  23. ^ Clara Ferreira-Marques, Sarah Young, Polina Devitt: Glencore buys stake in Russian grain export terminal. October 2, 2012, accessed April 12, 2020 .
  24. ↑ Ukraine: Kernel completed a deal to acquire Druzhba Nova agricompany. June 19, 2013, accessed April 12, 2020 .
  25. ↑ Kernel selling Chortkiv sugar plant, sugar trading entity for $ 32.5 million. May 8, 2013, accessed April 12, 2020 .
  26. ↑ Astarta closes acquisition of sugar refinery from kernel. September 20, 2013, accessed April 12, 2020 .
  27. ↑ Kernel sells two oilseed crushing plants in Russia for 800 mln rubles. April 18, 2016, accessed April 12, 2020 .
  28. ↑ Kernel Agro Holding sells assets in Russia. March 11, 2016, accessed April 12, 2020 .
  29. ↑ Kernel acquired 100% of the agricultural holdings of UAI (Ukrainian Agrarian Investments). June 12, 2017, accessed April 12, 2020 .
  30. ↑ Kernel completed the purchase of Agro Invest Ukraine. July 6, 2017, accessed April 12, 2020 .
  31. ↑ a b Denys Krasnikov: Large agro firm Kernel buys grain carrier RTK-Ukraine for $ 64 million. February 20, 2019, accessed March 28, 2020 .
  32. ↑ a b “Кернел” готовится запустить второй терминал в “Черноморске”. November 30, 2018, accessed March 28, 2020 (Russian).
  33. ^ Investigators of the SFS study Kernel's involvement in money withdrawal schemes. December 15, 2017, accessed April 12, 2020 .
  34. ↑ SFS to seizure kernel trade documents. January 9, 2018, accessed April 12, 2020 .
  35. ↑ a b Kernel divested its stake in Taman Grain Terminal to VTB Group. March 23, 2020, accessed April 12, 2020 .
  36. ↑ KERNEL COULD CONSIDER SALE OF SHARES IN GRAIN TERMINAL IN RUSSIA'S TAMAN PORT. May 30, 2019, accessed April 12, 2020 .
  37. ^ Maria Kiselyova, Andrew Osborn: Russia imposes financial sanctions on Ukraine's political elite. November 1, 2018, accessed April 12, 2020 .
  38. ^ Russia sanctioned a number of Ukrainian agricultural companies and businessmen. November 1, 2018, accessed April 12, 2020 .
  39. ↑ Ukraine's kernel selling last asset in Russia. March 31, 2017, accessed April 12, 2020 .
  40. ↑ Ilona Sologoub: Ukraine is finally ready to embrace land reform. November 26, 2019, accessed on March 30, 2020 (English).