France's Ouvre becomes latest sugar maker to shut plant (updated)

Suedzucker AG

14/01/2025 18:19

* 
      Cristal Union to process Ouvre's sugar beets from 2025
    

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      Lower sugar prices have sapped producers' profits
    

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      Saint Louis Sucre (Suedzucker) asked farmers to cut
plantings
    

  
 (Rewrites with company confirming definitive plant closure)
    By Sybille de La Hamaide
       PARIS, Jan 13 (Reuters) - French sugar maker Ouvre has
decided to shut its sole factory due to technical and financial
problems, the company told Reuters on Tuesday, marking the sixth
sugar plant closure in France in as many years.
    France is the European Union's largest sugar producer but a
series of poor harvests, caused by adverse weather and diseases,
has deterred some farmers from growing beets, cutting supplies
for sugar makers. More recently a fall in sugar prices has hit
profits.
    Family-owned Ouvre, which operates one sugar plant located
in Souppes-sur-Loing, south of Paris, with an output of about
60,000 metric tons of sugar per year, had been forced to halt
output late last year due to severe technical problems.
    It asked Cristal Union, France's second largest producer
that has several sugar refineries in the region, to process the
sugar beet harvested by its members in 2024/25 with the hope of
restarting the plant in 2025/26.
    But financial problems prompted it to decide a closure of
the factory, which it had announced to representatives of the
109 employees, it said in an emailed statement.
    "In a saturated market, where our competitors, large
industrial groups, are reducing the number of their factories,
the cost of rehabilitating our industrial tools exceeds our
financial capacities," Julien Ouvre, chief executive of Ouvre
and Sons, said in the statement.
    The closure reduces the number of sugar factories in France
to 19 from 25 at the end of the last decade. Cristal Union and
Saint Louis Sucre, the French branch of Europe's largest sugar
maker Suedzucker  SZUG.DE  have both shut two, while top
producer Tereos has shut one.
    Ouvre has reached an agreement under which Cristal Union
will take sugar beet from its farmers for the 2025/26 campaign,
the company said.
    The stoppage coincides with an expected reduction in sugar
output across France over the coming season and a fall in sugar
prices.
    European sugar prices dropped 30% in the year to November to
hit a two-year low of 599 euros per ton, according to the latest
available data. Global sugar prices  LSUc1  traded near
three-year lows on Tuesday.
    Saint-Louis Sucre told its members on Dec. 24 it would
reduce the area for the 2025 harvest by 15% due to lower
European sugar prices and high Ukrainian imports.
    The overall impact on France's sugar output - about 4
million tons per year - is likely to be minimal as most farmers
are expected to deliver their beets to Cristal Union or Tereos,
which is also courting Ouvre's growers.

 (Reporting by Sybille de La Hamaide; editing by Barbara Lewis)
 ((mailto:Sybille.deLaHamaide@thomsonreuters.com; +336 8774
4148;))