2024-01-11 12:10:54
The fruit, starch and sugar company Agrana is currently benefiting from high sugar sales prices, but the wave of duty-free sugar imports from Ukraine is putting a strain on business. “The beneficiaries are sugar trading companies that export to Europe, and not Ukrainian beet farmers,” criticized the new Agrana boss Stephan Büttner in an APA interview. He wants to promote “economic performance” and growth. There are currently no plans to withdraw from Russia.
As of June 2022, Ukraine was only able to export around 20,000 tons of sugar per year to the EU. In order to support Ukrainian agriculture, which is suffering from the Russian war of aggression, the EU lifted certain agricultural tariffs until June 2024. For the current sugar marketing year 2023/24, imports from Ukraine of up to 700,000 tons are expected. The Ukrainian sugar imports had “massively affected” Agrana sales in Romania, Bulgaria and Hungary, said the Agrana CEO. “This is a considerable loss for us because we have lost a lot of sales volume and also have lost contribution margins and higher storage costs.” Büttner can imagine a sugar quota of a maximum of 200,000 tons per year for Ukraine in the future.
According to the company boss, there are currently no plans to withdraw from Russia, where the company operates a factory. Although he condemns the Russian war once morest Ukraine, an exit would not be in the company’s economic interest, especially since it is a profitable branch. The business “cannot simply be written off”. “From our point of view, an exit from Russia is neither legally nor economically feasible,” said Büttner. It must also be seen that Agrana does not produce lifestyle or luxury products, but rather supplies the local population with food.
The listed Agrana is best known among end customers in Austria for its “Wiener Zucker” brand. The group employs around 9,000 people at 55 production sites worldwide. Büttner has been CEO of Agrana since the beginning of the year. He took over the scepter from Markus Mühleisen, who stepped down following a two and a half year term as head of the company. Büttner did not want to comment in more detail on the somewhat surprising departure of Mühleisen, whose predecessor Johann Marihart had been at the helm of Agrana for almost three decades. That is a matter “between Mr. Mühleisen and the supervisory board.”
Regarding his goals as the new Agrana boss, Büttner said that he wanted to continue working on Agrana’s strategic agenda and further improve its economic performance. Although the company is largely satisfied with the earnings development, “it is still not the case that we can say that we are a very profitable company.”
Agrana sales in the first three quarters of 2023/24 amounted to 2.95 billion euros and consolidated profits amounted to 78.1 million euros, as the group announced on Thursday morning. In the same period last year, there was only a small profit of EUR 5.4 million due to depreciation in Ukraine and Russia. Agrana shares were listed on the Vienna Stock Exchange on Thursday followingnoon with a price increase of 2 percent at 14.65 euros.
The company has recently also had setbacks in Asia: Agrana took write-downs of 16 million euros on two fruit preparation plants in China in the third quarter because lower demand and higher price pressure were putting a strain on business there. “Ambient” yoghurts that can be stored at room temperature are booming in China and Agrana supplies fruit preparations only for chilled dairy products.
From Büttner’s point of view, the most important thing is to reduce the dependence on price movements on the markets – as far as this is possible as a food company. One or two additional purchases are conceivable for this purpose. “We will have to grow.” In any case, such a development will not happen overnight, especially since the ownership structure and their interests are complex and the company has limited resources. The German sugar company Südzucker, the Raiffeisen-Holding NÖ-Wien and the beet producers together hold around 81 percent of Agrana, 19 percent are in free float.
For the full year 2023/24, Agrana management expects “a very significant increase” in consolidated operating profit and “a moderate increase” in sales. From the fourth quarter of 2023/24 and the following months onwards, “an increasingly challenging business environment is expected,” said Büttner.
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