British Sugar Take Further Steps in Face of Sugar Reform

With already achieved efficiency improvements, further capital expenditure in retained facilities, and the anticipated reduction in non quota sugar, the company is able to process the entire UK sugar beet crop in fewer factories.

05/07/06 British Sugar Group has announced further measures to maintain its leadership position in the EU sugar sector. This is in addition to its recently announced collaboration with BP and Du Pont on the UK's first biofuel facility, the closure of two of its Polish facilities and its intention to purchase a controlling stake in Illovo Sugar Limited.

Reform of the EU sugar regime is driving a fundamental restructuring of the sector.  With already achieved efficiency improvements, further capital expenditure in retained facilities, and the anticipated reduction in non quota sugar, the company is able to process the entire UK sugar beet crop in fewer factories.  As a result, the company has proposed that beet processing will cease at its Allscott and York factories at the end of the 2006/07 campaign, reducing its production facilities from six to four.
 
Commenting on the announcement British Sugar CEO Mark Carr said, "Given the significant changes in the environment in which we operate stemming from the reform of the EU sugar regime, this programme seeks to improve our efficiency capitalising on our continued focus on process innovation, asset utilisation and ongoing investment.
 
This proposal will be taken in consultation with employee groups and our growers.  While changes like this are difficult, they are necessary if we are to ensure the long term sustainability of this industry in the UK.
 
Our main priority now is to understand the individual needs of the people involved.  Every effort will be made to identify alternative opportunities for those who may be affected by the planned closures."
 
Emphasising its continuing commitment to the sector, the company also confirmed its intention to purchase the additional quota available in the UK as a result of Regime Reform.  Its Polish operation has already indicated interest in applying for its share in that country.
 
The company will be discussing the possible options for sugar beet growers with the National Farmer's Union and has indicated that it expects to be in a position to outline these in two to three weeks.