HAMBURG (Reuters) – The CEO of Europe’s largest sugar refiner, Suedzucker, said on Thursday he was optimistic his business would expand, including internationally, once the EU sugar market hits the market deregulated this fall.
“As the European market leader, we will successfully shape the competition,” said Wolfgang Heer at the annual meeting of shareholders of Suedzucker.
“On the basis of a solid capitalization, we want to further expand our internationalization strategy and supply our customers all over the world on the one hand.
For decades, EU production quotas have given sugar refiners almost captive markets. But once the EU introduces its sweeping deregulation of the sugar market from September 30, 2017, farmers will be free to grow as much as they want and refiners allowed to sell sugar globally while production quotas and export limits are abolished.
“With the second half of the current fiscal year, a new era begins for us, as the essential elements of the organization of the EU sugar market will disappear,” Heer told shareholders.
“This will increase the competitive pressure and strengthen the influence of the world sugar market (on Europe). We are confident that we are well prepared.
“We know that the volatility of our sugar industry will increase. This will require a constant review of our efficiency increases and cost structures, ”he added.
Suedzucker announced on July 13 a 39.4% increase in operating profits in the first quarter of its new fiscal year 2017/18. It forecasts an increase in the group’s operating profits, including an increase in sugar profits over the full year 2017/18, which will include the first operations in the liberalized EU sugar market.
Reporting by Michael Hogan, editing by David Evans