Australia’s second-largest sugar milling company, Mackay Sugar Limited, has announced that a majority of its farmer-shareholders (75%) voted on 29th July in support of a takeover by Germany’s second-largest sugar producer Nordzucker AG. The farmers will retain a 30% shareholding in return for Nordzucker’s investment in the company.
Trading update in late May showed that Germany’s second largest sugar producer Nordzucker joined the queue with major European sugar producers to post a loss as the industry battles against a slump in prices amidst supply glut with prices falling to a 10 year low last year with little indication that the global market will see a positive uplift anytime soon.
The sale of one of Australia’s largest and last remaining grower-owned sugar milling company Mackay Sugar to Nordzucker has moved a step closer, with the State Government committing AU$14 million (US$9.7 million) lifeline to facilitate the closure of a deal.
Germany’s second-largest sugar producer Nordzucker will consolidate its sugar production in southern Sweden, closing one factory and investing €100 million in another. The move involves an undisclosed number of job losses, according to the company statement.
Nordzucker and Mackay Sugar Limited have agreed by contract that Nordzucker will acquire a 70 percent majority stake in the sugar company. The confirmation was announced on the Nordzucker’s website and comes after months of deliberations.
Europe’s second-largest sugar manufacturer Nordzucker is planning a reduction in personnel and a comprehensive restructuring of its operations in a bid to save €20 million as significant losses have already been forecast, according to local press reports.
Nordzucker is in talks to buy Australian producer Mackay Sugar, according to a Nordzucker spokesperson.
Plunging prices, reduced profitability offers acquisition opportunities says Nordzucker CEO [Full subscriber]
With global sugar prices falling by about 40% since early 2017 amidst glut, profitability and competitiveness of not only EU sugar companies have been hit hard. As such, some EU sugar producers with weak finances are expected to go out of business and become targets for a possible takeover, said Nordzucker’s CEO Lars Gorissen, according to Reuters.
In response to demand for organic sugar, Nordzucker has taken steps to conclude contracts for the first organic sugar beet in 2017, and to market the first volumes of organic beet sugar in 2018. Germany and Denmark are identified by the company as the best locations for cultivating organic beet.
Germany – Nordzucker’s 2015/16 beet sugar output drops and just manages a tiny profit in Q3 [Registered]
The Nordzucker Group has ended the 2015/2016 beet campaign with sugar yields at its operations in six countries declining on average by between 7 and 30%.Beet sugar yields were in the range 5.3 t to 13.1 t/ha in 2015/16 compared with 7.6 t 14.3 t in the previous year. The company made the announcement at its website.