‘Plant had to close’

IRISH SUGAR profits will be hit by an EU sugar industry reform, even after closure of the Carlow plant cuts annual production costs by €6m to €7m.

“Whilst the initial reform proposals are likely to be modified, inevitable reductions in quota make the move to one manufacturing facility unavoidable,” said David Dilger, Chief Executive of Irish Sugar’s parent company, Greencore plc.

The company said it made political representations on the reforms, but will inevitably be more exposed to low cost competition, and it had to rationalise now, to survive as a competitive sugar processor.

Already, imports have taken 20% of the Irish sugar market. With the planned closure of the Nestlé operation in Ireland in March 2005, Irish Sugar will lose 10% of its Irish sales, and an export market downturn over the last five years is equivalent to €25 per tonne of beet, according to the company.

Surpluses of quota sugar in the EU, increased exporting costs, market positioning for the post reform era, downward pressure on industrial usage, and upcoming quota cuts are listed by the company as threats to survival.

Irish Sugar Chief Executive Dr Sean Brady said large scale EU producers like France and Germany are aggressively targeting producers vulnerable to the EU reform, and their sales targets include large Irish industrial consumers of sugar.