HAMBURG (Reuters) - The CEO of Europe’s largest sugar refiner Suedzucker said on Thursday he was optimistic his company would expand, including internationally, once the EU’s sugar market is deregulated this autumn.
“As the European market leader we will shape the competition successfully,” Wolfgang Heer told the Suedzucker annual shareholder meeting.
“On the basis of a solid capitalization we want to further expand our internationalization strategy and supply our customers worldwide from one hand.”
For decades, EU production quotas have given sugar refiners almost captive markets. But once the EU introduces its radical sugar market deregulation from Sept. 30, 2017, farmers will be free to grow as much as they want and refiners permitted to sell sugar globally as output quotas and export limits are torn down.
“With the second half of the current financial year a new era begins for us, as the core elements of the EU sugar market organization will fall away,” Heer told shareholders.
“This will increase the pressure of competition and strengthen the influence of the world sugar market (on Europe). We are convinced that we are well prepared.”
“We know that volatility in our sugar sector will increase. This will demand a constant review of our efficiency increases and cost structures,” he added.
Suedzucker on July 13 reported a 39.4 percent surge in operating profits in the first quarter of its new 2017/18 financial year. It forecast a rise in group operating profits including higher sugar earnings in the full 2017/18 year which will include the first operations in the liberalized EU sugar market.
Reporting by Michael Hogan, editing by David Evans