One of the largest sugar manufacturers in Europe has acquired a 70 per cent stake in Australian sugar producer Mackay Sugar.
The Nordzucker Group, headquartered in Braunschweig, Germany, will contribute $60 million for the stake to build up its production capacities outside of Europe.
The move is part of the company’s strategy to focus on sugar production from sugar beet and sugar cane.
Mackay Sugar has four operating raw sugar mills in Queensland, which produce around 800,000 tonnes of raw sugar a year.
The equity and debt capital contribution will be used mainly for maintenance and capital expenditures to increase the availability of the remaining plants, which have an annual production of around 700,000 tonnes of sugar over the next few years.
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Mackay Sugar’s shareholders will need to approve the transaction which is subject to other conditions precedent such as the sale of one of the four sugar factories.
Nordzucker Chairman of the Executive Board Lars Gorissen said the growth in sugar is taking place in regions outside of 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,” Gorissen said.
“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.”
Nordzucker Chairman of the Supervisory Board Jochen Johannes Juister said Australia is a politically stable country with optimal local infrastructure.
“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.”