January 31, 2019 / 2:35 PM / 16 days ago

UPDATE 1-Suedzucker to close two German sugar factories in restructuring

(Adds details, background)

HAMBURG, Jan 31 (Reuters) - Suedzucker, Europe’s largest sugar refiner, said on Thursday it plans to close two German sugar production plants as part of a restructuring programme announced this week.

The plants are in Brottewitz and Warburg and together produce around 200,000 tonnes of sugar annually, a Suedzucker spokesman said.

The company said on Tuesday it plans to cut sugar production volumes by up to around 700,000 tonnes per year including factory closures because of the current slump in sugar prices.

Suedzucker produces about 5.9 million tonnes of sugar a year.

“I can confirm that closure plans for the plants in Brottewitz and Warburg have been sent to the supervisory board by the management board in the framework of the restructuring measures,” the spokesman said.

However, both plants would continue to operate normally in the 2019 sugar production season, he added. The production season starts in the autumn.

The two plants employ around 150 people in total.

Suedzucker said on Tuesday the restructuring plan aims to cut costs by about 100 million euros ($115 million) annually in the face of a “historically low” EU sugar price.

Raw sugar futures ended 2018 at their lowest in 10 years, pressured by heavy global oversupply.

Suedzucker on Jan. 10 reported a third-quarter operating loss, hit by the global collapse in sugar prices.

The European Union liberalised its sugar market in September 2017, ending its system of guaranteed minimum prices and protected production quotas. This gave producers more freedom to expand and export, but a worst-case scenario emerged, with European producers exposed to collapsing world prices. ($1 = 0.8705 euros) (Reporting by Michael Hogan, editing by Susan Fenton)

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