News Sugar
Südzucker cuts production 700.000 tons
The German sugar group Südzucker reports that production will be cut back sharply. This should bring the financial balance back into the figures and ensure that the supply is better aligned with the demand for European beet sugar. Factory closures are not excluded.
By reducing sugar production by 700.000 tons, the international group hopes to save up to €100 million a year. This volume accounts for 15% of the total, so reports the. In 2018, 4,7 million tons of sugar were produced from sugar beets.
29 factories
Südzucker has a total of 29 European sugar factories and 2 refineries. In addition to Germany, where the cooperative is active, it also has branches in Belgium (Tiense Suiker), France, Poland and a number of Eastern European countries.
The effects of this decision on the Belgian subsidiary Tiense are not yet clear. The plan was presented to the board of directors on Tuesday, January 29, which must now approve it. This process will take several weeks. In 2018, the sugar branch of Südzucker made a loss of between €150 and €200 million, mainly as a result of the historically low sugar market.
Area
In addition to Germany, sugar production in other countries is also being reduced. Logically, the future is uncertain, especially for poorly performing factories, such as in Hungary and the Czech Republic. Südzucker has not reported how many hectares of beets are involved.
The announced measure comes shortly in the spring; especially when looking at when the decision of the board of directors was taken. Especially where the company is not represented cooperatively (Poland and Belgium), it can act quickly by simply offering fewer contracts for cultivation.
Niels van der Boom
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