Nordzucker sees better sugar price in the long term

Nordzucker sees a recovery in the sugar market in the medium term. Like Cosun, the German sugar group expects the demand for sugar to increase in the coming years. It reported this when it presented the annual figures for the 2018/2019 financial year, which the group had to close with a loss of €36 million.

To illustrate: 1 year earlier, Nordzucker made a profit of €118 million. Suiker Unie, part of Cosun, also had to end 2018 with a historic loss, although the cooperative refuses to specify this loss in figures. Nordzucker's revenue fell by 18% to over €1,35 billion.

Nordzucker reports that the sour apple of overproduction in both the European Union and the world market has to be bitten for a while. The hope is based on an increase in the demand for sugar. The long-term outlook is good, Nordzucker reports. "This is despite the current low prices and largely unbalanced discussion about sugar in food." For the current financial year, however, the group is once again counting on red figures.

Focus on beet and cane
"Sugar is a global growth market and we want to participate in it," said Lars Gorissen, Nordzucker's chief executive, in the statement. The European Union remains Nordzucker's core market. “However, politicians are called upon to create a level playing field for our sustainable sugar production.” The German group is also examining whether mergers, acquisitions or other forms of participation with other sugar companies within the European Union are possible.

Nordzucker is also targeting expansion on the world market with cane sugar. "Our strategic focus is on beet and cane," says Gorissen. Nordzucker took a 70% stake in Mackay Sugar Limited (MSL), Australia's second largest sugar producer, in February. This has given the company access to cane sugar production outside Europe. This transaction still has to be approved by MSL's shareholders, though Nordzucker expects to get their approval.

Eric the Thrush

Eric is a member of the editorial staff of Boerenbusiness. As a descendant of an arable family, farmer's blood flows through Eric's veins. He considers himself a generalist, but with a preference for economics, trends, markets and marketing.

e.delijster@boerenbusiness. Nl

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