Germany’s Nordzucker has inked a deal to acquire a 70% stake in Australian sugar producer Mackay Sugar, giving it access to Southeast Asian markets.
Nordzucker will invest AUD 60 million ($42.5 million) for the share capital, while Mackay Sugar will also receive an additional shareholder loan of up to AUD 60 million.
The transaction is subject to the approval of Mackay’s shareholders and other conditions such as the sale of one of its four sugar factories.
The equity and debt capital contribution will mainly be used for maintenance and capital expenditures in order to significantly increase the availability Mackay’s three remaining plants with an annual production capacity of about 700,000 tonnes of sugar over the next few years.
Lars Gorissen, Nordzucker chairman of the executive board, said: “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.
“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.”
Jochen Johannes Juister, Nordzucker chairman of the supervisory board, added: “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.”
With around 900 employees, Mackay Sugar produces around 800,000 tonnes of raw sugar annually for both the domestic market and export distribution. It also holds a 25% interest in Sugar Australia, a sugar refining joint venture within Australia and New Zealand.
© FoodBev Media Ltd 2019