PARIS (Reuters) - French sugar beet growers said on Tuesday they would make an offer to Suedzucker next week to take over two French sugar factories that the German group plans to halt next year, as they seek to secure outlets for their production.
A surge in sugar output after the European Union abolished production quotas in 2017 and a 40 percent slump in prices since early 2017 in an oversupplied world market have left many EU companies struggling with plunging profits.
The crisis prompted Suedzucker, the EU’s largest sugar refiner, to announce a plan to cut capacity by 700,000 tonnes and close five sugar production units to save about 100 million euros ($112 million) a year.
In France, Suedzucker seeks to halt sugar output at two factories run by its Saint Louis Sucre branch in Eppeville in the north and in Cagny in Normandy. The two sites would focus on storage, with additional animal feed output in Cagny.
French sugar beet growers group CGB has devised a plan through which a farmer-owned cooperative would take over both of Saint Louis Sucre’s sites, with regional financial support, Benoît Carton, regional head of CGB in Normandy said during a protest in front of the German embassy in Paris.
French growers will be directly hit by the closures as they have few other outlets for their beets, whose guaranteed price had secured some farmers’ income for decades. More than 2,500 growers will be affected, the government has said.
CGB will present the plan to banks in France on Friday and to the German group on May 15 at a meeting in Strasbourg, it said.
“It will have to go back to the highest levels of the government for this to move forward,” CGB regional head Patrick Dechaufour said. “The political pressure for us is very important.”
French Agriculture Minister Didier Guillaume and Junior Economy Minister Agnes Pannier-Runacher met with Suedzucker management, including chief executive Wolfgang Heer, in mid-March to discuss the restructuring.
A day earlier, French growers had protested in front of Suedzucker’s headquarters in Mannheim, Germany.
Competitor Cristal Union also said it intends to close two sugar factories in France next year as it expects global oversupply to continue pressuring prices.
The country’s largest producer, Tereos, has said repeatedly that it has no closure plans.
Reporting by Danielle Rouquie; Writing by Sybille de La Hamaide; Editing by Dale Hudson