Danisco to shed three Nordic plants and lose up to 350 jobs

Danisco has announced plans to close three Nordic plants and lose up to 350 jobs as the sugar giant aims to remain competitive in the face of upcoming EU sugar reforms. Danisco said that its measures will contribute to realising the previously announced earnings level for the sugar activities of DKK 600-750 million.

Danisco reported that effective on 1 July 2006, the conditions for both the sugar industry and the beet growers will change due to the EU’s new sugar regime and new rules for EU sugar exports. In the light of this development, Danisco is planning major efficiency improvements with the aim of safeguarding its position as a leading European sugar supplier.

Danisco said it would close its sugar factories in Assens, Denmark, Köpingebro, Sweden and in Salo, Finland, after the 2006 campaign. Meanwhile the measures include a sale of parts of the sugar quotas in Sweden and Finland and the purchase of extra quota for the sugar factory in Anklam, Germany. Danisco will optimise administrative functions in 2007. Danisco said that the efficiency measures will affect up to 350 employees and reduce Danisco's total production of quota sugar by around 100,000 tonnes.

Danisco reported that the Danish production of sugar has in recent years exceeded the EU quota by around 75,000 tonnes (C sugar), corresponding to around 20 per cent of Danisco’s Danish EU quota. Under the new conditions in the EU the possibility of exporting, and thus producing, C sugar to the current extent no longer exists, and with modest investments it will be possible to process the Danish sugar quota at two factories. Based on a thorough analysis of the beet growing potential, we estimate that it will be possible to maintain sugar beet growing in Denmark at the present quota level.