Suedzucker, Europe's largest sugar refiner, said on Thursday that trading conditions remained intensely difficult with low sugar prices and no turnaround likely for the company's current financial year. "Our group forecast for the current financial year still shows no visible turnaround," CEO Wolfgang Heer told the annual meeting of Suedzucker shareholders.
"Sugar prices remain at a low level which does not cover costs." He said in an advance release of his speech that a restructuring plan in the company's sugar business, which includes closures of sugar factories in Germany, France and Poland, was on schedule. But the first financial benefits will be seen in the second half of the company's 2020/21 financial year.
Suedzucker had on July 11 reported a 40% drop in first-quarter earnings due to low global sugar prices. Global sugar prices hit their lowest in 10 years in late 2018 amid heavy world oversupply and have only stabilised at depressed levels in 2019. Suedzucker said in January it would close sugar factories in Germany, France and Poland and cut production capacity by 700,000 tonnes per year to save about 100 million euros annually. Despite the tough current market, Heer said Suedzucker remained optimistic for the future. The sugar business restructuring will focus production on the most cost-effective regions, he said.