German sugar refiner Nordzucker turns to South America after EU prices fall
Nordzucker, Germany's second-largest sugar refiner, forecasted a loss for its new financial period on Wednesday due to low EU sugar prices. It said it would diversify into South America in order to reduce its dependence on the European market.
Nordzucker announced on Wednesday that its operating profit for the fiscal year 2024/25 had fallen by 76% to 100 million euro ($113.19 millions).
Nordzucker stated in a press release that the main reason for a drop in sales was the sharp fall in sugar prices across Europe.
Nordzucker, a non-listed company, has warned that the low EU sugar price will affect earnings. This warning was also made by Suedzucker, Germany's largest sugar producer, and Tereos in France.
As part of its support of Ukraine after Russia's invasion of the country, the EU allowed imports of cheap Ukrainian sweetener. This led to a drop in sugar prices, which has affected EU producers.
Nordzucker stated that it expects operating losses to be in low double-digit million euro ranges in its new financial year 2025/26. The company said that it expected a stabilisation in the EU sugar market, as the sugar beet area planted this year has decreased across the EU. However, significant price increases are not expected until October 2025.
The CEO of the refiner, Lars Gorissen, said that the company aimed to diversify its business outside of Europe (which currently provides 86% of its sales) and expand the cane-sugar business it acquired in 2019 through the purchase of Australia’s Mackay Sugar.
He said that he had been studying the market for the past few months and concluded that South America and Brazil were the most competitive markets. "We want to establish ourselves there," he added, adding it was still too early to provide a timeline of a possible acquisition.
When asked if takeover talks were underway, he replied "we are actively developing projects". (Reporting and editing by Jane Merriman, Sophie Walker, and Michael Hogan)
(source: Reuters)
