OREANDA-NEWS. The largest financial and industrial group of Ukraine, Rinat Akhmetov's System Capital Management, has changed the management structure. Igor Syry, the CEO of Metinvest Holding, will occupy a newly introduced position of SCM's Chief Operating Officer. The appointment is a part of the restructuring to improve interaction between different businesses of the Group. It may also be a sign of the Group's intention to expand into key markets, experts say.

Yesterday SCM's press office announced a new position, Chief Operating Officer, and appointment of the CEO of Metinvest Holding Igor Syry to the post. Mr Syry will be also a member of the Supervisory Board of Metinvest Holding. “We believe that Igor Syry is the best candidate for the job as he has a deep knowledge of SCM's business and corporate governance system,” said SCM's CEO Oleg Popov yesterday commenting on the appointment.

Tomas Fiala, CEO of Dragon Capital, notes that the position of Chief Operating Officer introduced by SCM is one of three key management positions in international business along with Chief Executive Officer and Chief Financial Officer. As a rule, this senior manager is responsible for managing business processes and reports to CEO. “This type of structure is clear for international creditors and investors,” notes Mr Fiala.

In addition, the SCM's press office also reported that on 24 December Yuriy Ryzhenkov, a former Chief Operating Officer at SCM Group's energy holding DTEK, is going to replace Mr Syry as CEO of Metinvest Holding. DTEK's press office explained that the position of the Chief Operating Officer at DTEK will be cancelled. They refused to give any more details as the reorganisation is still in progress.

Yuriy Ryzhenkov will run a very efficient mining and metal company, noted Ivan Dzvinka, an analyst of Investment Company Eavex. He also underlined that this year the company had closed the merger with Black Iron Inc. and thus increased its iron ore raw materials reserves. In H1 2013 EBITDA of Metinvest increased by 14% to \\$1.2bn and the net profit - by 31% to \\$443m. “The company showed good performance while many other players in the national market suffered losses in the first six months of this year,” noted the expert. He believes that at this position Mr Ryzhenkov will focus on diversification of Metinvest Holding's sales and proceed with the policy of cost reduction initiated by his predecessor.

SCM's press office stated that Mr Syry will have to address complex issues such as organising intra-group interaction and raise operational efficiency with the help of interaction policy. They also noted that over recent years SCM has been gradually implementing the business diversification strategy by establishing industrial holdings. “We think that now the company is at the threshold of the new development stage. Our goal now is to ensure that SCM businesses can find internal synergy and interact effectively with each other,” reported the company. SCM's CEO Oleg Popov will focus on strategic development of the Group's businesses, according to the SCM's press office.

SCM is the leading financial and industrial group of Ukraine with the share in Ukraine's GDP making 3.9%. In 2012, SCM Group's consolidated revenues made \\$23.47bn. SCM Group includes Metinvest, DTEK, Renaissance Capital, ASKA, ASKA-Life, Vega Telecommunications Group, Ukraina Media Group, ESTA Holding, HarvEast, Portinvest and other companies. The company is fully owned by Rinat Akhmetov.

Over the last five years SCM has expanded through acquisition of different businesses. As a result, some of the companies of the Group have opposite interests which makes it hard to interact efficiently, noted CEO of Investment Company Concorde Capital Igor Mazepa. For this reason, the company needs a person to address conflicts of interests between the holdings' units and develop a common policy, he said. According to Mr Mazepa, Igor Syry is appointed to this position as he led the SCM's major business generating about 53.4% of its total profit. Seven years ago Igor Syry had similar objectives when Metinvest Holding was established: to align the work of individual companies with opposite interests. “This means that in terms of intra-group cooperation SCM will be guided by the interests of Metinvest in the first place,” explained Tomas Fiala.