AkzenteNews from Nordzucker | Issue 2 | July 2012

Nordzucker and Wilmar enter partnership

t 2012/2013: All signs point towards a good beet year

tt Global sugar market: USDA presents initial estimate for the fi nancial year 2012/2013

Best resultNet income more than doubled

2

28

27

NEWS UPDATE4 Best result in the company’s history

6 Profiting from one another – Nordzucker and Wilmar Sugar enter partnership

8 Occupational health and safety: “No need for accidents to happen!”

9 Safety wins: Nils Marwede receives the 2012 occupational health and safety award

10 Nordzucker’s internal audit department – Sparring partner for all other departments

11 Nordic Sugar under new management – Flemming Lyngholm assumes leadership of the Northern Europe region

12 SERIES: Profitability plus: Positive forecast after successful year

BEET13 Lithuania: ‘Golden Beet’ for the best

14 SERIES: 20 · 20 · 20: Cultivation trials

15 All signs point towards a good beet year

8 18Aim: zero accidents. With a Group-wide plan of action, Nordzucker aims to again raise awareness of occupational health and safety among all of its employees.

Germany’s favourite berry is the strawberry. Schwartau’s fruit scout knows where the best ones grow.

CoNteNtS

MARKETS AND CLIENTS16 Spotlight on the market: High prices have a long reach

18 Sweet spread with a traditional touch – A visit to the Schwartauer Werke factories

COMMUNITY20 Recipe: Blueberry and blackberry compote with cinnamon cream

tt

tt

Akzente 02/12 3

Dear shareholders and friends of Nordzucker,

At the end of May we had the opportunity to present outstanding results at our press conference on the financial statements. At EUR 208 million, we more than doubled the Group’s profit against the previous year. In the same period, we managed to increase our operating result (EBIT) from EUR 188 million to EUR 315 million. This success is rooted in a number of different factors. In the sale of sugar, we have benefited from the increased price in the EU. And besides prices, we have also increased our company’s efficiency, thus enabling us to cut costs.

As our shareholders, we also want you to share in this success. For this reason, the Annual General Meeting of Nordzucker AG will be proposing a dividend of EUR 1 per share this year, more than double last year’s figure.

Nordzucker has grown in recent years and has developed into a truly European company. The Nordzucker Group’s regions profit from each other’s expertise and we all benefit from the feedback that we receive in our daily work as a result of our varied cultural backgrounds. All this moves Nordzucker forwards. The fact that we are now a truly European group is shown no less by the revenues, with more than half of the EUR 2,018 billion being earned outside of Germany.

And yet, we must avoid concentrating solely on the road already travelled. We must consider what lies ahead, too. We are faced with changes in the European sugar market regime. The European market needs a predictable and reliable supply of sugar – that’s why we need the sugar market regime through to 2020. Not to mention that we are preparing ourselves for the time afterwards, as well.

Europe needs sugar from the global market, and this is where our partnership with Wilmar Sugar is important. We will be shrewd in determining the further steps to ensure Nordzucker’s success.

My colleagues and I on the Executive Board look forward to meeting many of you at the Annual General Meetings. Should we not see you, we’d like to take the opportunity now to wish you a pleasant summer with just the right amount of rainfall.

Best regards,

Hartwig Fuchs

The European market needs a predictable and reliable supply of sugar – that’s why we need the sugar market regime through to 2020.

Hartwig Fuchs

»editoriAl

4

Nordzucker doubles profit and dividend“As a businessman following the traditions of the Hanseatic League, I’m not at all keen on throwing around superlatives. Still, I think it’s safe to say that 2011/2012 was a very good year for Nordzucker,” said Hartwig Fuchs, Chief Executive Officer of Nordzucker AG, open-ing his speech at the press conference on the financial statements held on 31 May 2012 in Braunschweig.

Glowing figuresThe figures that were subsequently presented supported his state-ment. The Nordzucker Group’s revenues rose year on year by 11 per cent to EUR 2 billion. More than half of this was generated in

the Eastern and Northern Europe regions. “This is a clear sign of how Nordzucker has become a truly European company in recent years. We were able to capitalise on our leading market position in Northern Europe, and we made the most of the opportunities that arose in the much more volatile markets of Eastern Europe,” continued Fuchs.

The operating result and net income were also increased significantly in comparison to 2010/2011, itself already a very good year, with net income increasing more than twofold to approximately EUR 208 million. Net debt was reduced considerably once again and equity grew in parallel, now coming to EUR 999 million.

Best result in the company’s history

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Nordzucker has benefited in all regions from significantly higher sugar prices.

Net income more than doubled – EBIT increased considerably in EUR million

Net income EBIT

2009/2010

-10

66

2010/2011

91

188

2011/2012

315

208

Revenues well up on previous year

2009/2010

Total revenues (EUR million) Revenues by region

2010/2011 2011/2012

1,806 1,8152,018

Northern Europe

40 %

CentralEurope

46 %

Eastern Europe14 %

Akzente 02/12 5

Good prices achievedThe price of sugar in the EU increased significantly compared to the previous year. Nordzucker was able to benefit from this in all regions. “However, most critical was the fact that we managed – in spite of the tense supply situation – to supply all of our customers with sugar. Here, we made use of the opportunities offered by the European Commission for the conversion of non-quota sugar, further increasing the import of sugar from the global market. We also managed to shrewdly control the flow of sugar within the Group to optimise the supply situation,” said Mats Liljestam, Chief Marketing and Sales Officer, explaining the market situation.

Shareholders take share in the successNordzucker considers providing the shareholders with an appropriate share of the result to be a matter of course. Nordzucker AG will therefore be proposing a dividend of EUR 1 per share, up from 46 cents last year, at this year’s Annual General Meeting. In doing so, it has more than doubled the dividend from the previous year. At the same time, a considerable portion of the earnings has been retained to finance future profitable growth within the company.

Set course for the future“Our success clearly shows that we were right to dispose of un-profitable investments in recent years in order to focus entirely on sugar, which is our core line of business. We want to achieve further growth, make the company even more international and, at the same time, press on with integration within the Group,” said Fuchs, outlining the plans for the future. Nordzucker has been successful over the past two years, but the goal has not been to maximise short-term profit. Instead, the aim has been to achieve lasting and sustainable profitability, as this is the only way to safeguard beet cultivation in Germany and the EU in the long term. n

“The figures for the last two financial years demonstrate how well the company has been developing. But we also know that the markets will not stay this way forever, so we have to prepare ourselves for new situations. This includes continuing to work on improving our efficiency, our processes and the way we work together.

Our efficiency programme Profitability plus, which will stay in force until 2014/2015 with cost savings totalling EUR 67 million, remains an important cornerstone for our further development. It has allowed a large number of employees from all areas of the company to contribute their ideas to make the company stronger. Of course, efficiency alone is not enough to achieve long-term success in the market, but without efficiency, we won’t be able to achieve success in the long term.”

dr. Michael NothChief Financial Officer

Opening up new perspectives. Acting jointly.The Nordzucker AG Annual Report keeps you up to date about the current business situation and the development of the company. You will also find detailed interviews and reports on topics related to markets and future pros-pects. We would be glad to send you a copy. Simply send an email with your address to IR@Nordzucker.de.

You can also find the 2011/2012 Annual Report in our Download Center under ‘Shareholders’ at www.nordzucker.de.

increasing efficiency remains a hot topic

2011/2012 Annual Report

Opening up new perspectives. Acting jointly.

NeWS UPdAte

Development of dividend per sharein EUR

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

0.60

0.40

0.00

0.20

0.49 0.49 0.49 0.48 0.480.46

1.00

0.280.22

0

1.00

0.80

1.20

Bianca deppe-leickelManager investor Relations

6

Since February, Nordzucker has been working in partnership with the Asian agricultural company Wilmar Sugar Pte. Ltd., a subsidiary of the Singapore-based Wilmar International Limited. Which aims are the two companies pursuing with their partnership and what are the advantages for both companies? An interview with Dr Niels Pörksen, Chief Agricultural Officer of Nordzucker AG, and Jean-Luc Bohbot, Managing Director, Wilmar Sugar Pte.

Mr Bohbot, Wilmar Sugar is already well established in Asia, but it is practically un-known in Europe. Could you tell us briefly about your activities in the sugar sector? Jean-Luc Bohbot: Wilmar is a well estab-lish company in Asia, leader in the edible oil crushing, refining and distribution. In

China the Group has a market share above 40 per cent in some edible oil. However, the Group also has a strong presence in Europe, in Germany, Netherlands, Russia and Ukraine. We are a leader in Oleochemi-cal and biodiesel.

In 2010 Wilmar acquired Sucrogen, that produces about 16 million tonnes cane and about 2,2 million tonnes raw sugar. With the Asian market in deficit, this sugar is naturally exported to the Asian markets. Sucrogen is also a large refiner in Australia (two refineries with 750,000 tonnes refining) and in New-Zealand (one refinery with 250,000 tonnes refining).

We acquired in Indonesia two refineries, with a total sugar production of about one million tonnes

In 2011, we established Wilmar Sugar, the trading arm, present in Asia, Europe,

Africa, Brazil. We recently took a participa-tion in a US company, precessing sugar in the US and Mexico.

Dr Pörksen, why is Nordzucker working together with Wilmar Sugar?Dr Niels Pörksen: There are a number of reasons for this. Our goal is to import raw cane sugar to be processed in our refineries. This is because the European market needs imports from the global market, given that only around 85 per cent of the sugar re-quired for human consumption in the EU may actually be produced here. Nordzucker owns refineries in the EU located at strate-gically valuable sites. We need raw sugar for these. Wilmar is therefore an excellent partner for the procurement of raw cane sugar, because the company has a great deal of expertise in trading.

Profiting from one another

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Wilmar International Limited: Company headquarters

Nordzucker and Wilmar Sugar enter partnership

Akzente 02/12 7

Importing raw sugar is one thing, but are there other opportunities afforded by the partnership with Wilmar? Dr Niels Pörksen: Yes, there are indeed. This partnership allows us to expand our net-work with the global markets, thereby pro-viding us with additional sales channels for exporting EU sugar to the global market. The partnership also provides us with the means to enhance our expertise in sugar trading.

Wilmar Sugar and Nordzucker operate in different parts of the globe. So why is it still of interest to work together with Nordzucker? Jean-Luc Bohbot: The sugar market is more and more globalized and integrated. Events happening in one part of the world affect the other part. The Europe sugar

market plays a crucial and center role in this globalization. Wilmar wanted to have a part-nership with a key player in Europe in order to share mutual strength for common benefit.

Wilmar is one of the leading producers of palm oil. Critics often claim that the expansion of palm oil plantations and the production of palm oil are not performed sustainably. What is Wilmar doing to ensure the sustain-ability of its operations? Jean-Luc Bohbot: Wilmar always had a very strong focus and care related to the sustainability question. We have a full department looking at those questions for our current operations and for any new investment. No investment are made without covering the sustainability consideration.

Is there any intention of taking this partner-ship even further?Dr Niels Pörksen: We have signed a part-nership agreement that provides us with new opportunities in the harvesting of raw sugar and the trading of sugar. Whether there will be other opportunities presented by the partnership is something we will see in due course.

Jean-Luc Bohbot: The partnership with Nordzucker is very important for us. We will observe precisely how this new part-nership develops now that it has started, and we will consider further steps together as the situation requires it. n

Interview conducted by Nina Tatter

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Wilmar is an excellent partner for the procurement of raw cane sugar, because the company has a great deal of expertise in trading.

»

dr. Niels PörksenChief Agricultural Officer

International group with headquarters in Singapore: Wilmar International Limited.

l Founded in 1991

l Company headquarters in Singapore

l Offices in more than 50 countries

l More than 90,000 employees

l Financial year 2010: Revenues USD 30.378 billion; profit USD 1.324 billion

l Financial year 2011: Revenues USD 44.71 billion; profit USD 1.6 billion

For more information, visit www.wilmarinternational.com.

Wilmar international limited

8

“No need for accidents to happen!”Paying more attention to occupational health and safety

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38 work-related accidents in 2011/2012, compared with 29 in the previous year. However Nordzucker still performs above average compared to other companies in the industry.

Rise of accidents unacceptableFor Chief Operating Officer, Axel Aumüller, this rise is unacceptable. “We can’t simply take the attitude that ‘accidents just hap-pen’ when it comes to health and safety.

I’m glad that the Nordzucker factories have all got off to a good start in the campaign. At Nordzucker, occupational health and safety has absolute priority. After many improvements and a favour-ably position in industry comparisons made by the German Sugar Industry Employers’ Insurance and Accident Pre-vention Association, the number of work- related accidents1 at Nordzucker sadly rose last year. There were

No! There’s simply no need for accidents opposite is correct, he says. He is con-vinced that “work-related accidents are a matter of organisation”. “This simply means that most work-related accidentsoccur as a result of work processes being improperly organised.”

“We’re aiming for zero accidents”Indeed, 98 per cent of work-related accidents are the result of improper organisation and mistakes. Aumüller is now determined to counter the negative trend of the previous year. Under his guidance, Nordzucker is once again placing the focus on occupational health and safety. A strategy has been agreed that contains not only an updated policy but also an ambitious action plan. “Our vision is zero accidents. This is not a topic of debate! When it comes to occupational health and safety, we aim to take on a leading role in both the sugar industry and in related industries,” says Aumüller.

Campaign action planQuestions on health and safety are questions that affect every Nordzucker employee. And so Nordzucker is emphatically looking to increase the awareness of each individual when it comes to this topic. For this reason, the company is bringing active involvement and accident prevention more to the fore than ever. “Health and safety needs to rapidly be-come an ‘issue for everyone’,” summarises Aumüller. Basic training and safety training

1 Accidents resulting in leave of more than three days

Axel AumüllerChief Operating Officer

Occupational health and safety is closely tied to our corporate values. Responsibility plays a rather special role here, which in turn heavily affects our operating business. Every employee is responsible at all times for their own actions!

»

Occupational health and safetyThe mision and visionNordzucker wants all employees to be safe and healthy at the workplace and does not tolerate unsafe work or conditions that impair health.

Nordzucker principlesl We believe in safety first, the “zero accidents” philosophy and continuous

improvement.

l We accept that compliance is a must and that we must have a strong Health & Safety organization to support and drive our work.

l We expect leaders to show the way and all employees actively to take part.

l We will train our people and implement our Health & Safety vision and strategy through strong, certified systems and regular audits

for all are intended to contribute to this. Further company tools and guidelines are being developed, for example within risk assessments and incidents reporting. Support is also provided in case of special problems. All Nordzucker factories are actively involved in the execution of the action plan, which

enters force before the next campaign. They will be supported by the health and safety working group.

One health and safety result can now be seen across the Group, and that is the helmets, safety shoes and signal-coloured safety jackets, a unified set of personal pro-

tective equipment for anyone present on Nordzucker factory premises. n

iver drabaekSustainable Development, Copenhagen

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All Nordzucker factories are involved to realize improvements on future occupational health and safety.

Nils Marwede receives the 2012 occupational health and safety award

Safety wins

At the end of March, Nils Marwede, an electrician from the Nordzucker AG Uelzen factory, was awarded the main prize in the ‘sugar’ category for the 2012 sponsorship award for occupa-tional health and safety. The award is organised by the German Raw Material and Chemical Industry Employers’ Insurance and

Accident Prevention Association. The award ceremony took place with 400 guests in Frankfurt am Main’s Alte Oper. The prize of EUR 10,000 was awarded to Marwede for his development of a computerised permit. This makes it possible to improve safety during the maintenance of electrical systems. “The program I de-veloped makes coordinating dangerous work on a system easier by ensuring that systems are not accidentally reconnected to the network while someone is carrying out maintenance. This helps to avoid severe accidents,” explained Nils Marwede after the award ceremony.

An important contribution to improving health and safetyChief Operating Officer, Axel Aumüller, gave a speech in praise of Nils Marwede, showing his pleasure at the main award going to Uelzen and summarising that “the electronic permit system developed by Mr Marwede makes an important contribution to improving health and safety.” For Sven Buhrmann, director of the Uelzen factory, Marwede’s receiving the award demonstrated that “we have committed staff who participate actively towards improving their workplace, and it also shows the role that health and safety plays in Nordzucker AG’s factories.”

The sponsorship award, for which a total of EUR 100,000 is given, is the highest-value award for occupational health and safety in Germany and is intended to recognise and encourage improvements in this area. This year’s prize marked the fifteenth time that it had been awarded. n nt

Nils Marwede and Axel Aumüller at the award ceremony in Frankfurt am Main.

Akzente 02/12 9

Signal-coloured protective clothing, a helmet and safety shoes form the personal protective equipment for anyone present on Nordzucker factory premises.

Copenhagen

Braunschweig

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10

Anna Marijke Goedeke-Huitemaheads Nordzucker’s internal audit department

Since Nordzucker AG was founded, the company has grown. More and more com-panies operate together under the Group umbrella. The primary goal is to sell sugar and animal feed. On the whole, the organi-sational structure in the company has become more complex and more interna-tional in nature. In the process, the signifi-cance of clear rules and transparent pro-cesses has grown – and this is where the internal audit department comes into play.

The internal audit department examines the sugar sales process, for example. Be-

fore sugar can be used by the customers for the production of jam or wine gums, there is a large number of cogs that must first interlock and operate together. An offer is prepared, a contract for a certain quantity is signed and later, a portion of this quantity is ordered. Then comes the logistics. A lorry drives up, loads the ordered quantity of sugar with the agreed quality and delivers it. The chain of pro-cesses that takes place continues through invoicing to payment.

“We support Nordzucker in achieving its goals by independently and systematically analysing the organisation and processes from an outside perspective, as it were, and then developing recommended courses of action,” says Anna Marijke Goedeke-Huitema, head of internal auditing, sum-marising her department’s work. Goedeke-Huitema and her colleagues are not involved in the day-to-day processes of the organi-sational unit that they audit. This makes them independent within the Group.

The internal audit department exam-ines, for example, whether processes meet applicable statutory regulations and whether

they are conducted in accordance with Nordzucker’s own internal regulations. In the case of internal regulations, for example, this might concern adherence to approval guidelines. “We examine the approval of sales agreements in the sales process. We also check whether invoices are prepared promptly, whether the receipt of payments is monitored and whether the process as a whole is efficient,” says Peter Stark.

In order to examine whether processes run as planned and whether the flow of information within the organisation under audit is functional, Goedeke-Huitema and her colleagues conduct interviews with managers and employees and analyse agreements and work processes. Finally, the team documents its findings and issues recommended courses of action.

“If Nordzucker is a house, then we go into every room. This means that we don’t just see individual tasks and processes, but rather the organisation as a whole,” says Karolina Damerau, illustrating the work of the internal audit department. Each of the Group companies is audited at regular

The sparring partner for all other departmentsImproving processes from an outside perspective

A valuable outside perspective: The internal audit department is responsible for ensuring that processes focus on achieving goals and are in compliance with the law.

>>

intervals. This enables the auditors to see how a certain task at an office in Poland, Sweden or Germany is performed. These comparisons enable the department to suggest ways of improving processes and structures.

“We see ourselves as the sparring partner of the departments that we audit. We’re all pursuing the same goal, namely the eco-nomic success of Nordzucker. With an un-biased perspective, we see things from a different point of view, and so together

we can improve processes and create additional value for the organisation,” summarises Goedeke-Huitema. n nt

Since 1 June 2012, Flemming Lyngholm is the new Managing Director (MD) for the Northern Europe region. Previously, he served as the MD for Nordzucker in Eastern Europe. Now, Lyngholm is mov-ing from Vienna back to Copenhagen, where the law graduate used to be re-sponsible for Nordic Sugar’s activities in Lithuania. Nordzucker’s CAO, Dr Niels Pörksen, is provisionally assuming lead-ership of the Eastern Europe region.

Strengthening and developing Northern europe“With the appointment of Flemming Lyngholm, not only the cultural identity of Nordic Sugar is preserved, but we also expect significant progress in our growth together,” commented CEO Hartwig Fuchs. “After a period of transi-tion, we are glad to have a full manage-ment team in Copenhagen again. Lyng-holm’s knowledge of the Northern Europe region, his experience from the Eastern Europe region and knowledge

that he has acquired in other areas of Nordzucker means that the team is be-ing provided with valuable experience.” He said that Lyngholm and his team would continue working to strengthen and develop the position on the North-ern European markets.

Flemming Lyngholm has been a member of the expanded Nordzucker Executive Board since 2009. Now he is looking forward to his new task. “The three years that I spent working in East-ern Europe were an exciting and very fulfilling time that I shared with some great colleagues. But now I’m glad to be returning to the Nordic Sugar team.”

Nordzucker closes Vienna officeStaff and roles moved to other locationsNordzucker’s Eastern European team is also soon due to relocate to new prem-ises. Their Vienna office will close on 31 July. Following the closure of its Hungar-ian factories and the sale of the factories in Serbia, Nordzucker is relocating all

administrative activities in Vienna to oth-er Nordzucker offices. Irrespective of this, the Eastern Europe region will con-tinue to be operated as an organisation-al unit. The staff previously working in Vienna will perform their duties at other offices.

Since its foundation in 2009, this Group region has developed very suc-cessfully and today contributes a signifi-cant portion to Nordzucker’s overall result, contributing 14 per cent of revenues in the last financial year. “The necessary structural modifications have been suc-cessfully implemented by the Eastern Europe team and are an important cor-nerstone for the outstanding develop-ment,” commented CEO Hartwig Fuchs. “It’s time for us to become more stream-lined, more efficient, and fit for the future.” The closure of the Vienna office was described by Fuchs as the first step towards a tailor-made organisational structure that Nordzucker will create in the coming months. n nt

Nordic Sugar under new managementFlemming Lyngholm moves to Copenhagen

Flemming lyngholmassumes the position ofManaging Director of theNorthern europe region

Akzente 02/12 11

Nordic Sugar headquarters on Copenhagen’s Langebrogade.

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12

After washing the beet, the beet slicer is the second station in the factory that beet pass through on their way to becoming sugar. When it was first brought into op-eration in 1994, the Klein Wanzleben sugar factory had two modern drum slicers that supplied a large extraction tower with beet pulp. In 2000, a second smaller ex-traction line was added. A third slicer of the same design has since supplied both extraction lines.

Until the 2010 campaign, the slicer station was configured so that each slicer led directly to an extraction plant. The third slicer could alternately supply one or the other extraction line via a reversible con-veyor belt.

Aim: A consistent supply flowThis has enabled the slicing work to be accomplished successfully for many years. If one machine experienced downtime, it was compensated by another. As the beet processing output rose to 16,000 tonnes per campaign day, so did the level of inconsistency with which the extraction plants were supplied with pulp. It was no longer possible to sufficiently compensate for the failure of a slicer. This negatively affected work in the extraction, the pulp press unit and pulp drying equipment, where large reductions in raw juice and variations in dry content in the pressed pulp required considerably more energy.

Ideas for improving the inconsistent supply to the extraction lines by rearrang-ing the pulp conveyor belts were rejected

and a fourth used slicer of the same model was installed instead. This allowed for a solution whereby the factory’s supply of pulp could be optimised in the long term in one fell swoop.

Pulp quantities: controlled as neededThe beet slicer station in the Klein Wanz-leben factory is now configured so that, as before, one slicer feeds each extraction

plant directly. The other two slicers can alternately supply either of the extraction lines via a reversible conveyor belt. Using two-way valves below the machines and with the assistance of adjustable-speed motors, we can now control the pulp quantities as needed. If a machine sud-denly experiences downtime, this now has hardly any influence on the extraction work. Within seconds, the control system

Machine transfer within seconds already earned half a million

Positive forecast after successful yearProfitability plus measures pay off

In the second year following the launch of the Profitability plus efficiency initiative, Nordzucker has achieved its cost-saving goals. The Profitability plus measures implemented in the Central Europe region in 2010 and 2011 also earned their money. Earnings were positively influenced by ideal campaign condi-tions in 2011. The effects forecast in December 2011 were con-firmed at the end of the financial year. Around 95

per cent of all of the measures implemented had to be scrutinised and recalculated. Nordzucker’s goal for the financial year 2011/2012 has been achieved and we look with great confi-dence into the future. More ideas will contribute to the success of the efficiency initiative. Udo Harten, director of the Klein Wanzleben factory, presents a Profitability plus project that was finished with remarkable results.

“Inconsistencies in slicing have a negative impact on all the subsequent stations in the factory.”Director Udo Harten in the sugar building of the Klein Wanzleben factory.

SeRieS: Profitability plus

Klein Wanzleben beet slicer station

NeWS UPdAte

>>

Beet

Akzente 02/12 13

has adjusted the pulp quantities in the remaining machines.

Significant energy savings and consistent raw juice qualityNordzucker invested EUR 390,000 in this Profitability plus project in 2010. The results are there for all to see and have exceeded the forecast effects. The raw juice distraction has been stabilised and

kept to a low level, the ethanol factory benefits from a more consistent raw juice quality, the pulp press units are supplied more consistently and, encouragingly, we have been able to reduce the use of energy considerably. Energy savings alone have enabled this measure to make more than half a million over the course of the past two campaigns. Annual savings total-ling EUR 200,000 were forecast. n

Anne-Katrin rohdeSenior Manager Operational excellence (OPeX)

Udo HartenDirector Klein Wanzleben

Lithuania: ‘Golden Beet’ for the best

When it comes to producing sugar beet, Rimantas Garuckas, a farmer in the city of Radviliškis, has the golden touch. The Nordic Sugar farmer and two of his col-leagues from Lithuania have been awarded the prized Golden Beet for outstanding achievements in beet cultivation. Arūnas Bielskis of Baltic Agro UAB handed over the weighty, golden glass sculpture during this year’s Golden Beet industry meeting in Kaunas, Lithuania’s second city. Since 2006, the Golden Beet has

been awarded each year to particularly well-performing beet farmers. Over the past ten years, the Lithuanian Nordic Sugar farmers have managed to almost double their sugar beet yields. The farmers’ cooperation with Nordic Sugar’s cultivation advisers, research institutions and manu-facturers of seed, fertiliser and plant pro-tection products has contributed signifi-cantly to this. In order to continue this productive exchange and continuously encourage further progress, the beet

farmers meet once a year at the invitation of Nordic Sugar and other agricultural businesses, outside of professional meet-ings and in a more informal setting for the ‘Golden Beet’ event. n

From the left: Arūnas Bielskis, Rimantas Garuckas and Algimantas Kizanskas.20 · 20 · 20 makes progress: In 2011, the top 20 per cent of Nordzucker beet farmers by yield achieved an average of 15.9 tonnes of sugar per hectare of sugar beet.

Saulius MozerisAgricultural Manager, Nordic Sugar Kédainiai

Sugar yield trends of the top 20 per cent of Nordzucker farmersin tonnes of sugar per hectare

2009/2010

15.3

2010/2011

12.9

2011/2012

15.9

2017/2018Target

16.6

2020Target

20.0

New cultivation methods designed to increase yields are a focus of cultivation trials: some of these methods may yet find their way into practical use quickly.

Beet SeRieS: 20 · 20 · 20

Cultivation trialsFocusing on quick success and future questions

With the 20 · 20 · 20 project – where the 20 per cent of the best beet farmers are expected to be harvesting 20 tonnes of sugar per hectare by the year 2020 – Nord-zucker is taking various different approaches to achieve its goal. In addition to intensifying cultivation advice, cultivation trials are also a major part of increasing yields.

Testing suitability for practical useSome of these are trials that rapidly find their way into practical use, such as row fertilisation during sowing or the ‘autumn

strip trilling’ technique. While technology is already available for row fertilisation, existing technology from spring strip tilling was used for the autumn strip tilling pro-cess. It is currently being tested at various trial sites in Northern Germany as part of a project.

Towards the future: Beet planted under film and equal-space narrow-row methodOther cultivation trials are more oriented towards the future. These include planting the beet under film or fleece, planting pre-

grown beet and using the ‘equal-space narrow-row’ method. With this method, the space between the rows is reduced to 30 centimetres and the distance between the beet in the row is increased to 30 centimetres so that each beet is given the same amount of room to grow in. n

The required technology for row fertilisation and autumn strip tilling is already available.

Dreams of the future: The even distribution of the beet over the field (equal-space narrow-row method) will improve the efficiency of land use.

dr. Andreas WindtManager Agricultural Management

14

Akzente 02/12 15

AKtUell

Sowing trend in Germany, 2009 – 2012as percentage of land under cultivation

40

20

0

60

80

100

17. March 24. March 31. March 07. April 14. April 21. April

2012 2011 2009 2010

Comparison of sowing dates by countryNordzucker Group, 2012 and average, 2007–2011

Finland

Lithuania

Poland

Slovakia

Sweden

Denmark

Germany

15 March

22 March

26/03 07/04

08/04

12/04

04/04

20/04

07/05

25/03

30/03

22/03 10/04

10/04 22/04

12/05

29 March

12 April

05 April

19 April

17 May

10 May

03 May

26 April

2012 Average 2007 – 2011

The majority of Nordzucker beet farmers across the Group started sowing early in the 2012 beet year. Much like the previous year, the early start of the vegetation stage ensured promising starting conditions, thus making long growth and high beet yields possible. The beet in Germany, Denmark, Sweden and Slovakia was sown around 14 days earlier than the average of the past five years.

The comparison over several years shows an example of how beet sowing has developed in Germany. It is apparent that sowing in 2012 was timed along the same lines as in 2011. In other words: early and compact! With the exceptions of Lithuania and Finland, this statement also applies to the other countries of the Nordzucker Group.

Varying emergence conditionsIn most locations, rainfall following sowing ensured sufficient emergence on the fields, but this occurred later than in the previous year. Overwhelmingly cool temperatures in early to mid-April allowed only average development of the beet. Frosts around Easter and mid-April attacked the young plants and resulted in resowing on certain fields. During the rest of April and May, there was a lack of rainfall in various regions and tem-peratures varied greatly, but this did not negatively impact beet development in any significant measure.

Beet rows close in earlyRow closure is an important indicator for the state of the beet, and this had already been observed on the first crops by the end of May. By mid-June, the beet development trends indi-cated overwhelmingly that 2012 would be a good year for beet. By contrast, crops are developing at a more average rate in Finland and Lithuania. The amount and distribution of rainfall in June/July and the subsequent control of leaf diseases is crucial for the beet’s further development. If these influences turn out to be favourable, Nordzucker can expect above-average harvests. n

dr. Ulf Wegener Vice President Agricultural Sourcing Strategies

Promising start after earlier sowing throughout the Group

All signs point towards a good beet year

Beet

pared to the 171 million tonnes produced in the financial year 2011/2012. The USDA expects almost all main production regions to increase their production. In the 2012/2013 financial year, it continues to hold true that ‘high prices have a long reach’. The high prices of the past two years have led to incentives in production worldwide, therefore also resulting in more arable land usage and an increase in cultivation intensity (increased use of fertiliser and plant protection agents). As a reminder, the prices quoted on the London Stock Exchange in July 2011 reached an all-time high of USD 876 per tonne of sugar.

important cultivation countries increase productionForecasts for Brazil assume that more sugar cane will be allocated from bioethanol

production to sugar production, thereby increasing the production volume to 37.8 million tonnes (2011/2012: 36.2 / +4.4 per cent). In India, the expansion of land used for sugar cane means that an increase in sugar production to 29.7 million tonnes (28.8 / +3.3 per cent) is expected. The cause of the land expansion is the higher profitability in comparison to wheat and maize. Increases in production are also expected for Thailand (2012/2013: 10.8 million tonnes; 2011/2012: 10.4 / +3.8 per cent), China (13.1; 12.3 / +6.5 per cent) and Australia (4.5; 3.9 / +15.3 per cent).

european Union: Yields below previous yearFor the EU, the USDA expects the harvest in 2012 to remain below the previous year’s record value as a result of average yields, and that it will therefore drop by

Global sugar market in 2012/2013: USDA presents initial estimate for the new financial year

High prices have a long reach

In mid-May, the US Department of Agri-culture traditionally presents its first estimate for the supply and demand situation on the most important agricul-tural markets in the new 2012/2013 financial year. This includes the global sugar market. The USDA’s estimates are used by almost all market players as a basis for their own market estimates and positioning, and so they have a direct influence on the development of stock exchange prices.

Production growth of two per cent expectedAccording to the USDA’s May report, global sugar production will rise in the coming financial year (October/Septem-ber) to 174 million tonnes, representing production growth of two per cent com-

MArKet ANd ClieNtS SPOTliGHT ON THe MARKeT

16

Loading sugar in São José do Rio Preto in the state of São Paulo: Sugar is loaded from big bags into hopper cars.

1.7 million tonnes to around 15.8 million tonnes. This would mean a decline of 10 per cent against the previous year.

In spite of the decline, the expected elevated stocks at the beginning of the new financial year (3.2 million tonnes according to the last estimate from the European Com-mission) mean that the extraordinary meas-ures taken in the previous year, such as the approval of non-quota sugar, are no longer necessary from a current perspective.

Consumption continues to riseThe global demand for sugar will continue to rise in 2012/2013. The USDA expects 163 million tonnes to be consumed world-wide, around two per cent more than in the previous year. The largest part of this growth in consumption will be attributable – as in recent years – to India (2012/2013:

26.5 million tonnes; 2011/2012: 25.5 / +4 per cent) and China (14.9; 14.4 / +3.4 per cent). There is, however, the need to state that a decline in global economic growth due to a return of the financial crisis may well also lead to a more restrained rise in sugar consumption. Compared to cereals, the demand for sugar is more susceptible to price changes.

increasing stocksIn spite of the expected continued growth in consumption, global production, driven by the higher prices of the previous year, will exceed consumption by around 10 million tonnes. Accordingly, stocks will grow even more in 2012/2013 by around five per cent year on year to around 33 million tonnes (2011/2012: 32 million tonnes).

Sugar production and consumption around the world2002 – 2013

Changes in stocks against the previous year (in millions of tonnes, right-hand axis)

Consumption (in millions of tonnes, left-hand axis)

Production (in millions of tonnes, left-hand axis)

Sources: USDA; F.O. LICHT and own calculations

10/11 12/1308/0906/0704/0502/03

120

100

80

60

40

140

160

180

-20

-30

0

10

20

30

-10

40

9 -1 -6 3 9 2

-11

-3 2 8 5

Sugar price trends on the global marketJanuary 2010 – June 2012 (monthly averages)

White sugar €/t

White sugar $/t

Source: Reuters, London Nr. 5

300

500

600

700

800

400

900

Feb2010

Jun2010

Oct2010

Feb2011

Jun2011

Oct2011

Feb2012

Jun2012

200

In 2011, sugar prices reached an all-time high. Since then, the build-up of stocks and high harvest expectations for the new financial year have caused prices to decline significantly.

dr. thordis MöllerEconomics

Akzente 02/12 17

MArKet ANd ClieNtS

Pressure on pricesThe build-up of stocks commenced in 2011/2012 and the expectations of a large harvest in the coming financial year have already caused a heavy decline in the previously high global market prices. The price for raw sugar on the global mar-ket fell by 18 per cent between January and May 2012, from USD 521 per tonne to USD 428 per tonne. A similar trend as on the global markets will come about in the EU, albeit some time later. n

Germany is placed in jars in the town of Bad Schwartau, near Lübeck. These jars might have a rustic feel to them, they might be slender, or they may even be curvy. This is where the market leader, Schwartauer Werke, has its headquarters.

The three factories at Schwartauer Werke, which was founded in 1899, are just a few hundred metres from the small town’s rail-way station. A number of building com-plexes – red brick buildings, an old villa and a modern building – collectively form the headquarters of the medium-sized family run business. Here Schwartauer Werke manufactures its jam and manages its busi-ness. The research and development de-partment is housed together with the marketing and quality assurance depart-ments in a bright, former marzipan factory that has been converted. This is where I met Dr Sebastian Portius. He is the managing director for research and development and quality assurance.

“The fruit that we mainly use is, and will always be, the strawberry. Around 40 per cent of the jam consumed in Germany is strawberry jam, or jam that combine strawberry with another fruit, say grapefruit or raspberry,” explains Sebastian Portius.

ensuring quality on siteThe company procures the strawberries from selected farmers in different regions, mainly Poland and Germany. A critical look

is already taken at the selection of suit-able strawberry varieties during the purchasing process. There are hun-dreds of different types.

Customer profile

Sweet spread with a traditional touch

At home near Lübeck since 1899: Schwartauer Werke.

Apricot and elderflower jam from Schwartau. According to the German ‘Konfitüre’ Regulation, only those products manufactured from citrus fruits can be described as marmalade.

MArKet ANd ClieNtS

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The Germans enjoy eating jams, or as they say correctly, “Konfitüre”. Despite the com-petition from chocolate hazelnut spreads, honey and peanut butter, around 155,000 tonnes of jam are sold in Germany each year. A large proportion of what is consumed in

The fruit scout travels to the various farms and checks the quality of each fruit variety on site.

Schwartauer Werke producing since 1899

Nina tatterCorporate Communications

“So that we can keep an overview here, we have an expert, a ‘fruit scout’ on loca-tion. He travels to the farms and selects the varieties that are especially aromatic,” says Sebastian Portius, explaining the com-pany’s purchasing philosophy.

The strawberries are then delivered fresh to Bad Schwartau and frozen there. The strawberries from Poland are frozen locally and delivered to Schleswig-Holstein in their frozen state. “This enables the straw-berries to be processed into jam while they are at their best quality, when they have their ideal ripeness,” says Sebastian Portius.

Around 300 different flavours define the taste of a strawberry. “For our prod-ucts, we use strawberries that are more full-bodied in taste than those you can buy at the grocer’s. This works because the strawberries are picked while they are ripe, frozen directly and do not spend several days being transported for sale. Our product developers use the different

Manufacturer of jam and fruit spreads, muesli bars and cooled fruit drinks

l 1899: Founded as ‘Chemische Fabrik’, a company that produced artificial honey and plum compote among other things

l 1904: Production starts on jams and marmalades

l 1907: Sugar refinery founded (shut down around the end of the First World War)

l 1927: Group of companies merges to become ‘Schwartauer Werke AG’

l Revenues in 2011: around EUR 330 million

SCHWARTAUeR WeRKe GMBH & CO. KGaA

strawberry varieties to compose the taste of our jam. This is how we can offer our consistently high quality,” explains Sebas-tian Portius.

700,000 jars a dayToday, around 700,000 jars are filled with jam in Bad Schwartau every day. To make good jam, you need sugar, just like when you’re preparing strawberries, raspberries or blueberries in your own kitchen. It doesn’t just sweeten the spread, it also preserves the fruit. Several silo trucks of sugar are processed each day.

The demand for jam remains consistent throughout the year, says Portius, unless Germans harvest particularly large amounts of fruit in their private gardens. Statistics say that 150,000 tonnes of jam are pre-pared in German kitchens. “When you look at it that way, Germany’s housewives pose some real competition for us,” says Portius with a grin. n

Akzente 02/12 19

Germany’s favourite jam fruit is the strawberry.

MArKet ANd ClieNtS

Ingredients for the blueberry and blackberry compote:

450 g Blueberries300 g Blackberries (either fresh or frozen)180 g SweetFamily 1-2-3 Rote Grütze

For the cinnamon cream:

250 g Cream1 pack cream stabiliser4 – 5 tsp SweetFamily Zuckerträume cinnamon

Preparation:

1. if using fresh fruit, wash it and remove the stalks. Alternatively, defrost frozen fruit. Mix half of the prepared fruits with SweetFamily 1-2-3 Rote Grütze and liquidise for 15 seconds until finely puréed. Then mix in the rest of the fruits and allow to sit for 15 minutes.

2. Whip the cream, cream stabiliser and Sweet-Family Zuckerträume cinnamon flavouring until firm.

3. Pour the blueberry and blackberry compote into small bowls and place a spoonful of cream on top. Decorate with a little SweetFamily Zucker-träume cinnamon flavouring and small wafers.

Preparation time:

25 minutes

Nutritional values per portion:

approx. 463 kcal3.2 g protein 63.9 g carbohydrates

Blueberry and blackberry compote with cinnamon creamBlueberry and blackberry compote with cinnamon cream