Suiker Unie consolidates Dutch sugar production

By Jess Halliday

- Last updated on GMT

Related tags European union Sugar

Cosun's Suiker Unie is to close its sugar factory in Groningen, The
Netherlands, as part of measures to reduce production in line with
the new sugar regime.

Groningen is the smallest of Suiker Unie's three factories in The Netherlands, and production is now to be concentrated in the other two, Dinteloord and Hoogkerk. A spokesperson for the company told that it will produce an estimated 800,000 tonnes of white sugar at the two remaining factories in the next campaign, at the level of Suiker Unie's national quota. This is, in fact, the same level as the prior campaign, since despite the closure of Groningen the campaign will run a month longer than usual. She confirmed, however, that reductions will be brought about in future campaigns. Nonetheless, the company has said that, by concentrating its production on the two remaining sites it seeks to retain its position in the market. It remains committed to beet farming and sugar production in The Netherlands, believing that it "will remain profitable in the long term, although production will be at a more modest level".​ Suiker Unie had mulled the possibility of constructing a bio-ethanol plant linked to the Groningen plant, in partnership with Nedalco. The closure announcement states that it has opted not to go down that route in the end since, for now, it does not believe that profitable production of bio-fuel from sugar beet is possible in the current circumstances. The new EU sugar regime, which came into effect in 2006, aims to improve the competitiveness of the EU sugar market by reducing the volume of sugar on the market by 6m tonnes by 2010. Unprofitable companies are being encouraged to leave the market through compensation, and new package was brought into effecting September as only 2.2 tonnes have been removed from the market so far and it was thought that further incentives were required. The change as caused considerable restructuring across the whole sector, as production quotas are limited. This is leading to producers juggling their quotas between different markets, closing down operations, and refocusing their business activities on other ingredients. Suiker Unie's closure of Groningen will lead to all 98 employees losing their jobs. While some will retire under schemes for elderly employees, others will be offered work at other Suiker Unie and Cosun companies. Royal Cosun acquired the Suiker sugar business from CSM last year for a reported €202m, after having waited a long time for approval since CSM's sale plan was first announced in February 2006. CSM felt the division could not compete in the industry once EU sugar regulations came into force. For its part, Cosun said that the move would make it stronger in the European market, and be able to serve its sugar customers on a larger scale. The Suiker Unie division was said to command around five per cent of the European sugar market.

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