Nordzucker wants to grow in the global sugar market

Nordzucker, the second largest sugar factory in Europe, wants to take over the Australian Mackay Sugar. The company hopes to grow in the global market with this, because it no longer sees any growth opportunities in Europe.

Outside Europe, there are still plenty of growth opportunities for the German group, while those in Europe are limited. "The sugar market (especially market demand) will not grow further in Europe, but it can still grow in the global market," a Nordzucker spokesperson told Reuters.

Nordzucker's spokesman confirmed that negotiations are underway for a share in Mackay Sugar. The first offer for this was made and involved a 70% share. The deal is likely to close in March 2019, given Mackay CEO Mark Day has indicated that the non-binding proposal has been approved in principle by the Mackay board.

Strategic step Nordzucker
Like Cosun, Mackay is a cooperative. At least 75% of the growers in the cooperative must therefore agree with the deal. Mackay produces 800.000 tons of raw sugar annually and is the second largest sugar producer in Australia. 

By way of comparison: Suiker Unie produced over 2017 million tons of sugar in 1,3. Nordzucker produces a multiple of that (2,7 million tons). The German company has several factories in Europe, including in Denmark and Poland. The acquisition of the factory in Australia is a strategic step, with a view to abolishing the European sugar quota. 

Anne-Jan Doorn

Anne Jan Doorn is an arable expert at Boerenbusiness. He writes about the various arable farming markets and also focuses on the land and energy market.

aj.doorn@boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.