Just over two months after entering his position, Tnuva Food Industries Ltd. CEO Eyal Malis is announcing comprehensive organizational changes in the structure of Israel's largest food group. The changes, which have been approved by Tnuva controlling shareholder, Chinese government owned Bright Food, follow a decline in Tnuva's results. Under the new company structure, some of the company's executives will be released and hundreds of employees will be laid off in coordination with the Tnuva Workers' Committee, headed by chairman Ahiav Simhi.
Malis said, "The new business structure will enable us to cope with the challenges facing us, while constantly searching for new growth engines in Israel and overseas. These measures are significant; they are designed to ensure that Tnuva is an efficient, agile, and relevant company. I am confident that the foundations we are layinng today will bring us value already in the short term."
Transition to matrix management
The new structure eliminates Tnuva's three groups: the dairy group, which Malis headed before he entered his present position; the brands group, headed by Eli Ben Lulu; and the merchandise group, headed by Erez Wolf. As part of the change, Tnuva will switch to a matrix structure with seven divisions, all subordinate to Malis.
Tnuva's core business in the local market focuses on its dairy and food divisions. Anat Gross-Shon, who was manager of Tnuva's milk business and marketing division for eight years, and who was Malis's right hand, has been appointed division manager. Gross-Shon gained a good professional reputation at Tnuva, and is becoming the most senior woman executive in the Tnuva group.
The brands group and the merchandise group are being merged into the food division, and Ben Lulu is being appointed its manager. Gross-Shon and Ben Lulu were promoted, while Wolf is leaving Tnuva.
Another change is the separation of the group's dairy enterprises from the milk operations division, to be managed by Danny Peretz. In recent years, Peretz has managed the Tel Yosef dairy, where Tnuva's hard cheese is produced. Iftach Bloch, hitherto the operations division manager in the dairy group, is leaving his position.
Tnuva formerly had two logistics divisions: one for the dairy group, headed by Micah Cohen, and one for the brands and merchandise groups, headed by Yaniv Kimhi. These two divisions have been merged into one, called the "corporate supply chain," to be managed by Kimhi, which Cohen is leaving his position. According to Tnuva, the purpose of the consolidation is to generate optimization processes at the corporate level, provide services to the company's business lines, and facilitate complete synchronization between the units.
Another executive being promoted is Guy Propper, who up until now has been Tnuva VP business development, and who now will also manage the company's international division. It appears that by creating this position, Tnuva is signalling its intention of expanding in the international market, which has been marked as one of the group's key goals in the coming years, and as a significant growth engine.
In this context, Malis said, "There is no doubt that Tnuva's acquisition by Bright Food can be expected to open opportunities for the company in international markets. Bright Food has been making substantial overseas acquisitions in recent years, and regards Tnuva as an important arm for carrying out this strategy."
In addition, Tnuva is also founding an innovation unit to open the company to innovative initiatives outside the organization and instill innovative processes throughout it. Tnuva VP information systems Yuval Tseiri will manage the unit.
With respect to the expected layoffs in the group, Malis said, "Tnuva is holding discussions for the purpose of devising a comprehensive streamlining plan in cooperation with the chairman of the workers' committee. This will include an assessment of a variety of activities in the company units and the group's centers in order to adapt Tnuva to the challenges it faces. As a result of the change in the work method, we unfortunately must part with worthy colleagues and friends, and I find this personally painful. I personally wish to thank all the executives we are saying goodbye to today."
Published by Globes [online], Israel business news - www.globes-online.com - on March 30, 2016
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