AGRANA launches raw sugar joint venture in Bosnia and Herzegovina

This project will be one of the first industrial investments of a foreign food company in Bosnia and Herzegovina since the end of the Balkans conflict and will create 160 new jobs in Brcko.

01/06/06 AGRANA, the leading sugar and starch producer in Central and Eastern Europe, is expanding its activities towards the Western Balkans. AGRANA will establish a raw sugar refinery in Brcko jointly with the Bosnian-Austrian company SCO Studen & CO Holding/Vienna as 50% partner. Capital expenditure for this project will amount to about €30 million, and the refinery will have a capacity of some 150,000 tonnes of sugar p.a. This project will be one of the first industrial investments of a foreign food company in Bosnia and Herzegovina since the end of the Balkans conflict and will create 160 new jobs in Brcko.

Johann Marihart – the CEO of AGRANA – explains the rationale of this investment decision as follows: “South-Eastern European countries, and especially the Western Balkans, have traditionally been important markets for AGRANA’s sugar exports. Because of the termination of C sugar production due to the WTO panel ruling and also as a result of the new EU sugar CMO, sugar exports from the EU are no longer possible. Nevertheless, the Balkans still are among AGRANA’s core markets, so that the construction of a refining plant for raw sugar is called for to ensure supply of these markets.” SCO is an ideal partner with a strong local customer network. AGRANA looks back on many years of successful sugar exports from the EU to the family business SCO in this region. SCO and AGRANA will each acquire a 50% stake in the joint venture AGRANA Studen Beteiligungs GmbH/Vienna, which will act as owner and operator of the Bosnian sugar refinery.

SCO does already operate an oil mill for the production of cooking fat in Brcko. The construction start of the new sugar refinery is still planned for 2006, so that operations can be expected to commence as early as 2007. Raw sugar will be used as raw material. It will be purchased on the world market and transported via waterways and railways. The production capacity of the new Bosnian refinery (150,000 tonnes) corresponds to the volume of EU export sugar that AGRANA has so far sold in this region via SCO Studen.

AGRANA operates nine sugar production plants in Central and Eastern Europe – two each in Austria, the Czech Republic and Hungary, one in Slovakia and two in the EU accession candidate country Romania. In the past 2005|06 financial year, some 900,000 tonnes of sugar were extracted from beets and about 282,000 tonnes were refined from raw sugar.