Australia sugar strategy: Nordzucker acquires 70 percent majority stake in Mackay Sugar
11 Feb 2019 --- Nordzucker is set to acquire a 70 percent majority stake in Australia's second-largest sugar producer, Mackay Sugar Limited. Nordzucker reports it is building up its production capacities outside of Europe and pursuing its strategy of focusing on sugar production from sugar beet and sugar cane. The transaction is subject to the approval of Mackay Sugar’s shareholders and other conditions, including the sale of one of the four sugar factories.
Nordzucker is to contribute equity capital in the amount of AUD 60 million (US$42.5 million) for the 70 percent stake in the share capital. Mackay Sugar is also to receive an additional shareholder loan of up to AUD 60 million (US$42.5 million).
The equity and debt capital contribution will be used for maintenance and capital expenditures to increase the availability of the three remaining plants with an annual production capacity of around 700,000 tons of sugar over the next few years.
Investment in cane sugar improves competitiveness
“The growth in sugar is taking place in regions outside the EU. By acquiring a stake in Mackay Sugar, we can secure a substantial share of the Australian market and gain access to the Southeast Asian market,” says Dr. Lars Gorissen, Chairman of Nordzucker’s Executive Board.
“Cane sugar production is profitable even at lower sugar prices due to cost structures. We are convinced that Mackay Sugar with its investments in the plants will be able to make in the medium term a sustained positive contribution to Group earnings,” Dr. Gorissen adds.
The Chairman of the Supervisory Board of Nordzucker AG, Jochen Johannes Juister, explains: “Like Nordzucker, Mackay Sugar is owned by its growers. Australia is a politically stable country and the local infrastructure is optimal.”
“The Supervisory Board is convinced that the entry into cane sugar production and the investment in Mackay under the conditions set is a strategically correct step to make Nordzucker stable and competitive in the long-term,” he notes.
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