Cosun defies sugar conditions to report growth
its margins somewhat in the coming year, as conditions remain tough
for the European sugar industry.
The sugar and ingredients group yesterday reported a 17 per cent increase in turnover for 2007 compared to the previous year, to €1.7bn. Although almost all its businesses contributed to this growth, the group said much of this was due to the acquisition of CSM Suiker in April 2007. Operating profit was down around €100m to €11m, but without goodwill amortisation and incidental items it actually increased from €72m to €115m. Sugar Cosun is predicting that its Suiker Unie activities will be hit by "very high restructuring levies" in 2008, as a result of the on-going sugar reform introduced in Europe in 2006 with the aim of improving competitiveness and market-orientation of the EU sugar sector and guarantee its long term future. "The pressure on Suiker Unie's margins will not lessen until a fair balance is struck between consumption, production and imports in the European Union," said Cosun. It does not expect any such balance to be achieved until quotas are revised across the bloc. However since CSM Suiker has already been integrated and the first synergy benefits seen, it expects this acquisition to make a positive contribution in the coming year and provide "some compensation for pressure on margins". Other ingredient businesses Sensus Cosun did not give break-out figures for the performance of its various businesses, but it said that for Sensus, the inulin manufacturer, 2007 was a year of growth in both turnover and results. The market for food products containing prebiotic ingredients like inulin, which make the gut environment more amenable for healthy bacterial flora and boost satiety, is predicated on the shift towards healthier eating. It can also be used as a fat replacer in products reformulated along healthier lines. But the group said: "The increase in turnover was clearly higher than the market average." Sensus now claims to be the number-two inulin supplier, with a 25 per cent share of the market. It said performance last year was boosted by a breakthrough that allowed for liquid inulin to be used in a new muesli bar in the United States. Sensus has also increased production at its Roosendaal facility, allowing facilities to be sued for longer periods of the year. This increase has been enabled by the company ceasing fructose production in 2006. Unifine Food and Bake Ingredients Unifine Food and Bake Ingredients reported a year with organic growth exceeding 6 per cent, thanks in part to a new European network organisation. Such growth was achieved despite the drag from raw material costs, said the group, and the inevitable delay in passing on the increases. The company flagged some of its innovations, particularly those enabling healthier baked goods with fewer unhealthy fats and calories, but that still taste food. In addition to streamlining its production in Spain and Portugal, which involved closing its site in Barcelona, Unifine last year acquired flour powder producer Atlanta Dethmers. Dethmers' bakery mixes and creams were said to be an especially good complement to Unifine's range. It also puts the business on a stronger footing in northwest Europe (as opposed to southern and central Europe, where its recent acquisitions activity has been focuses). In addition, Unifine acquired French soft gel, glazes and fondant maker Caullet. SVZ Cosun's fruit and vegetable ingredient division was also said to have had "an excellent year", thanks in part to higher selling prices as a result of higher purchasing prices. These purchasing prices stemmed from a poor harvest in Poland and a poor US raspberry harvest. These meant that turnover was higher, but profitability was also higher thanks to more sales of value-added products.
