AUSTRALIA – Nordzucker AG, Europe’s second largest sugar manufacturer has agreed to acquire 70% majority stake in Australian sugar producer Mackay Sugar for US$42.49 million (AUD 60 million).
The transaction, which is subject to the approval by the regulatory bodies as well as Mackay Sugar shareholders will also see the sale of one of its four sugar factories.
The deal will be funded through equity and debt capital contribution to be used for maintenance and capital expenditures at the three remaining plants which have an annual production capacity of about 700,000 tonnes of sugar.
Mackay Sugar will also receive an additional shareholder loan of up to US$42.49 million, all the initiatives looking to make the company sustainably profitable over the next three years.
Nordzucker is thus, building up production capacities outside Europe and consistently pursuing its strategy of focusing on sugar production from sugar beet and sugar cane.
“The growth in sugar is taking place in regions outside 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,” said Dr. Lars Gorissen, Chairman of the Executive Board.
“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.”
Headquartered in Braunschweig, Germany, Nordzucker Group is one of the leading sugar manufacturers in Europe and also produces bioethanol and animal feed from sugar beets.
Speaking on the investment, Chairman of the Supervisory Board of Nordzucker AG, Jochen Johannes Juister said: “Like Nordzucker, Mackay Sugar is owned by its growers.
Australia is a politically stable country and the local infrastructure is optimal.
“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.”