PepsiCo Senior Executive to Raise Cherkizovo Pigs

July 18, 2013

decades later he would become the head pork producer of Cherkizovo, a leading Russian agribusiness holding company. For the past three years, he has been involved in agricultural projects at PepsiCo, but because agriculture is not a core business for the American company, he was unable to display all his skills. 

RBC daily has learned that Cherkizovo Group has named Alexander Zhukovsky general managerofthe pork division. He is replacing Evgeny Mikhailov, the younger son of the group founder Igor Babaev. 

Mr. Zhukovsky told RBC daily that he had been raising animals since childhood. In his small Ukrainian village, he bred rabbits, which were a source of meat for his family in the winter. “I was responsible for 45 rabbits,” the senior executive said. But after completing his studies he decided to pursue aviation, so he entered the Riga Higher Military Aviation Engineering School, and after graduating he served in Northern Fleet air force units. 

In 1995, Mr. Zhukovsky decided to change focus, and he signed on as a manager with the American company Mars. He subsequently held various positions at Dancake, Eurobake, and InBev. In 2005 he landed at PepsiCo, where he climbed through the ranks, ultimately becoming agro director for Russia. 

“After PepsiCo acquired Wimm-Bill-Dann [the transaction was carried out in 2010 — Ed.], I started managing dairy complexes,” Mr. Zhukovsky said. At the time he saw the entire unrealized potential of the agricultural industry. However, agriculture is not a core business for PepsiCo, while Cherkizovo is one of the largest players in the sector, the senior executive said. “It seemed interesting to me to work at a company that has huge potential and sets high goals,” he added. 

In his new post, Mr. Zhukovsky will manage 14 pork production facilities in seven regions, as well as fodder factories. He faces several tasks: bringing all the facilities to full production, lowering producing costs, and promoting operational objectives. He will be assisted by a group of American managers who were recruited from various agricultural companies. 

Pork production is not as simple a business as many people think, Mr. Zhukovsky observed: “It was a revelation for me to see how far agricultural manufacturing technologies had advanced over the last decades.” It would be the same as comparing an airplane with a piston engine to a jet-propelled fighter plane, he said, recalling his background in aviation. 

At the end of 2012, Cherkizovo group was ranked the third-largest pork producer in Russia. This year, the company expects to increase production by 60 per cent and jump to the second place. Pork production is one of the four main business areas of the agribusiness holding company. In 2012, this segment made up $108 million of $315 million EBITDA, and $61.4 million of $225 million net profits. Investments in pork production made up some $500 million. 

Of course, the new manager is stepping into a difficult situation because most domestic pork production facilities suffered losses in the first half of 2013, recalled Natalya Yakovleva, president of the AVIS consulting group. “I think this is the right focus given that against the backdrop of an inauspicious situation overall in Russia for pork producers, a Russian expert with solid experience in the domestic agriculture industry will be helpful for Cherkizovo pork division,” she said. 

Mikhail Zhukov, managing director of HeadHunter, stressed that people like Mr. Zhukovsky are unique on the domestic market, so his hiring is a major success for Cherkizovo. “Usually companies actually look for such people in large international companies. In Russia, such positions are filled with the help of The Network, a global network of recruiting sites,” he said. He estimates that such a specialist earns around 500–600 thousand roubles per month, plus an annual bonus equal to 12 monthly salaries. Consequently, the overall annual income can reach 12–15 million roubles. 

“The total annual salary is not guaranteed, but the instruments of the income determination package enable me to receive a larger salary than at PepsiCo if success is achieved,” Mr. Zhukovsky said. “I wouldn’t say that the figures are very different, but it is a standard increase for the market when one moves from one workplace to another.”