Anatoliy Popelyushko is President of Kazakhstani confectionary business Rakhat JSC. With his son and heir, Maxim, he talks international expansion, candy and succession planning.
How did you come to work at Rakhat?
Anatoliy: I graduated from Moscow University with a degree in engineering, specializing in sugar production machinery. I gained a lot of experience as an engineer and senior manager at various sugar-producing plants, before moving to a production floor for Rakhat. I worked my way up to become President of the company in 1992. Business is now thriving and we currently employ more than 4,000 people, with production facilities in Almaty and Shymkent, Kazakhstan.
Maxim: I’m based in Edinburgh, where I moved to study business at university and get a master’s degree in emerging markets. My dad tried to get me to focus on the areas he has less knowledge of, so we can complement each other when we work together.
It was always expected that I would follow him into the family business and one day take on his role. Having joined the company properly in 2010, I’m now a shareholder and I support my father, particularly with English speaking countries.
How do your skills and experience complement the other’s?
Anatoliy: My background is engineering, so I have an understanding of how the machinery and the core functions of the business work. Max’s involvement is particularly important where we are expanding our activities beyond Kazakhstan, such as recent investment in Germany, confectionary sales to Afghanistan, Mongolia and China, and operations in Ghana.
Maxim: Recently, I’ve been able to travel a lot with my father and witness how he conducts business. I don’t have his engineering experience, but I can bring to the business what I have learned about corporate finance and investment, and emerging markets.
While my father is the expert at buying in new machinery and running production lines, I now have a good idea of how international businesses operate and grow.
What are the most significant obstacles Rakhat has had to overcome?
Anatoliy: The biggest challenge we face is the free market. The confectionery business in Kazakhstan is more competitive now, so producing high-quality products is the best way for us to stand out in a busy market.
Maxim: We have achieved this by using the best possible raw materials and by investing in machinery and good technological processes. If you can marry good-quality raw materials with the right manufacturing techniques, you will produce excellent products that will always appeal to customers.
You mustn’t let work affect family life.
What advantage do family businesses have over other companies and how tough is it to run a company when relatives are involved?
Anatoliy: I’d say it’s easier to preserve core traditions and qualities in a family business. The family values reflect on the company and you treat all employees as if they were family members, so there is a great sense of loyalty. But the more family members there are, the harder it is to reach a decision.
Maxim: The majority of people I met at the Ernst & Young Junior Academy Program in New York - a one-week training event for young successors in family firms - work in businesses that have “family councils” to decide how much influence each person has.
It’s important to have a plan in place, but it’s also essential to never mix family and business. If you have a family problem, you need to keep it outside the company. Similarly, you mustn’t let work affect family life.
What are your ambitions for the business?
Anatoliy: My chief aim is to continue to produce our high quality products but also be innovative. We recently established Paxat, a sister company in Germany that produces sweets for diabetics - I’m a diabetic and had the idea to manufacture dietary sweets that don’t contain sugar. It’s been a huge success.
The handover will happen when the family thinks it’s right.
When will control of the company change hands?
Maxim: There isn’t an official time frame. The handover will happen when the family thinks it’s the right time. I’m looking forward to it, but I think my dad will still be quite heavily involved even if I become CEO. Officially, he should have retired a few years ago, but because it’s a family business, I think he finds it quite difficult to let go.
Anatoliy: It depends on Max’s readiness to accept the job. The process is ongoing and he has had several opportunities to acquaint himself with how the business works. It’s not possible to outline an exact time frame for succession right now as the process is ongoing, but progress is being made every day.
I saw the potential leadership qualities in Max when he was a young boy and I often took him to meetings to show him how the business was run. His ability and experience is growing all the time, but he is also still learning.