Nordzucker Post 1/2025 - 23 January 2025

Challenges and prospects in a volatile market landscape

Dear Readers,

We are on the home straight: in mid-February, the last beet will be processed in the German Nordzucker factories. This marks the end of an exceptionally long campaign. It was very different from the previous one, which was characterised by heavy and prolonged rainfall and flooding in many growing regions. The changeable conditions of the most recent campaigns are emblematic of the many challenges that our industry and the agricultural sector must overcome.

We continue to operate in a volatile sugar market. The recent significant fall in sugar prices is reflected in the balance sheet. The first months of the financial year still benefited from high sales prices. With the new sugar marketing year starting on 1 October 2024, however, the operating result declined as expected. Nevertheless, we will close the current financial year with a clearly positive result. We are not so confident about the financial year 2025/26; in view of the market situation, we can hardly rule out a negative result. This is a development that we have to expect in such volatile markets. We have introduced measures to reduce our costs and adjusted our beet contracts to the market situation, so we will produce less sugar in 2025. There are already signs of an easing in EU sugar prices due to the expected reduction in cultivation area next year; the low point seems to have been reached. Nordzucker is very solidly positioned and resilient.

Market conditions have also changed in the plant-based proteins segment. We have therefore decided to postpone the start of construction of the pea protein factory in Groß Munzel for the time being. The market for plant-based proteins is currently growing less than expected due to the general consumer restraint. In addition, there are further imports, particularly from China to Europe and newly emerging production capacities. This is leading to overcapacity in Europe and consequently to low prices. We continue to see great potential in the plant-based proteins market. At the same time, it is necessary for us to adapt our approach to the changing market conditions. We are therefore continuing to pursue the project, but are currently revising its direction. The pea cultivation contracts concluded for 2025 will be fulfilled.

Time is of the essence when it comes to other challenges, such as climate change and the spread of plant diseases. The spread of new harmful species such as the reed leafhopper, which transmits diseases such as stolbur and syndrome basses richesses (SBR), threatens not only sugar beet but also carrots and potatoes. We urgently need to work on solutions here – together with the sugar associations for our industry and with political support. For example plant protection: In order to stop the spread of the cicadas, plant protection products that have already been approved must be authorised for use against this harmful species in the short term. Together with the sugar associations, we are committed to this. At the same time, we are intensifying research into the interactions between host plants, vectors and pathogens, as well as the storage and processing quality of sugar beet.

It is clear that no sugar factory can operate without the raw material sugar beet. Our commitment also serves to secure jobs, added value and prospects in the rural areas around our sites. To lead this into a sustainable future, we need supportive political framework conditions. We are committed to this.

Kind regards,

Lars Gorissen, CEO