On Tuesday, Südzucker, Europe's largest sugar refiner, announced that it planned to cut capacity and close sugar production plants to save about €100 million ($114 million) a year, following a slump in sugar prices.
The company reported that it planned to reduce sugar production volumes by up to around 700,000 tonnes per year. It currently produces about 5.9 million tonnes of sugar a year, according to its website.
Südzucker reported that the cuts would affect its German and other European operations, without giving details or saying how many jobs might be affected.
On 10 January, the company reported a third-quarter operating loss, hit by the global collapse in sugar prices. In July 2018, it reported that it was considering 'all conceivable options' for its sugar operations.
Raw-sugar futures ended 2018 at their lowest in ten years, pressured by heavy global oversupply.
Guaranteed Minimum Prices
The European Union liberalised its sugar market in September 2017, ending its system of guaranteed minimum prices and protected production quotas.
This gave producers more freedom to expand and export, but a worst-case scenario emerged, with European producers exposed to collapsing world prices.
'With this restructuring plan, the executive board of Südzucker AG aims to reduce the impact of the strong price variation in global and EU sugar markets on the sugar segment, and therefore to secure and strengthen the sustained economic corporate success,' Südzucker reported on Tuesday.
'[The aim of the new restructuring plan] is to streamline the capacities more alongside the European market demand,' the company added.