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Agrana has announced the closure of two sugar plants in Leopoldsdorf, Austria, and Hrušovany, Czech Republic, with immediate effect.

The decision forms part of a strategic realignment to achieve long-term stabilsation and competitiveness for domestic sugar production, the sugar and starch specialist said. The company’s entire sugar production in Austria will shift to its site in Tulln, with a goal of focusing entirely on the Austrian market. In the Czech Republic, sugar production will be concentrated at Agrana’s Opava site.

The Leopoldsdorf site will remain in place as a logistics hub, with sugar to be stored in the existing silos and packaged there. Agrana said it is developing additional future scenarios for further potential economic use of the 70-hectare site in the short-term.

These closures will impact around 270 employees, 120 of whom work in Leopoldsdorf and around 150 in Hrušovany. The company said it is providing them with extensive support including retraining and qualification programmes, opportunities to take jobs at other sites within Agrana and individual redundancy packages, as well as advice on professional reorientation. One focus is on supporting regional labour forces in the surroundings of the sites.

Agrana’s decision was based on an evaluation of current economic and regulatory conditions. Rising production costs, increasing competition due to a decline in sugar consumption across the EU, regulatory requirements and market liberalisation – including the Mercosur agreement and sugar imports from Ukraine – have made it ‘economically unviable’ to continue production at the two sites, the company said in a statement announcing the closure.

According to the group, the current sugar market would not allow for the production volumes to make the operation of the affected sites viable in the medium-term, let alone the long-term.

Stephan Büttner, CEO of Agrana, said: “It was a difficult but unavoidable decision to close two production sites, especially because we are committed to sugar production in Central and Eastern Europe”.

He added: “We are taking this step fully aware of our responsibility for Austria as a sugar production location. By focusing on our site in Tulln, we want to create a stable and lasting basis for a sustainable Austrian production. Our aim is to make Austria a robust sugar production location.”