Hellenic Sugar Industry Update and Analysis

The Hellenic sugar industry has been undergoing significant changes in recent years. The industry has been facing challenges due to the high production costs and the increasing competition from imported sugar.

Greek sugar production has been steadily decreasing since 2015, with a decline of 15% in the past five years. The country's sugar beet production has also been affected by the droughts and heatwaves.

The Greek government has implemented policies to support the sugar industry, including tax breaks and subsidies for sugar beet farmers. These measures have helped to stabilize the industry, but more needs to be done to ensure its long-term sustainability.

The Hellenic Sugar Industry has been a significant contributor to the country's economy, with the sugar sector accounting for around 2% of the country's GDP.

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The history of sugar in Greece is a fascinating story that spans over a century. In 1842, the first sugar plant was founded near the village Kaenourgio of Locris, following a contract signed in 1839 by the Greek state with a Franch-Belgian company.

Unfortunately, the company went bankrupt and the effort was abandoned. This setback didn't deter the Greeks from trying again, as evidenced by the establishment of the Sugar House Hristaki B. Zograpou in 1892 at Lazarina, Thessaly.

The Sugar House operated from 1894 to 1909, producing a total of 8,000 tons of sugar. Despite its success, the harsh competition from foreign sugar and the inability to control pests on the beets led to its closure.

In 1960, a new era began with the founding of the Hellenic Sugar Industry SA in Thessaloniki. The company's first factory was established in Larisa in 1961, followed by factories in Plati in 1962 and Serres in 1963.

These initial factories had a processing capacity of 2,000 tons of beets per 24 hours. The company continued to expand, with the opening of a fourth factory in Xanthi in 1972 and a fifth factory in Orestias in 1975, each with a capacity of 3,000 tons of beets per 24 hours.

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The Hellenic Sugar Industry has been making waves in the sugar market. They plan to invite international bids for their sugar plants in Serbia, with a potential buyer being Austria's Agrana, a subsidiary of Europe's largest sugar producer, Südzucker.

The company has a long history in Greece, with the first sugar plant being founded in 1842, but it went bankrupt due to harsh competition and pests. Hellenic Sugar Industry SA was founded in 1960 and has since become the sole sugar producer in Greece.

Here's a brief overview of the European sugar industry's quota reductions:

Country2006/20072007/20082008/2009 (*) Belgium (Be)880.990815.032782.576Bulgaria (Bg)4.110Czech Republic (Cz)471.965351.203425.843Denmark (Dk)380.680384.672397.096Germany (De)3.289.1163.779.6873.816.846Greece (El)184.80678.388157.383Spain (Es)1.199.544763.209630.586France (F met.)4.084.6974.456.1054.167.723France (F Dom)286.969232.301255.741Italy (It)789.643835.106523.545Latvia (Lv)59.935Lithuania (Lt)96.624103.25677.518Hungary (Hu)385.885268.707106.728Netherlands (Nl)913.478842.485920.239Austria (At)406.966369.288423.539Poland (Pl)1.676.8521.874.6721.347.910Portugal (Pt cont.)46.18114.154Portugal (Pt. Açores)1.8871.0061.000Romania (Ro)95.249112.557Slovenia (Sl)43.442Slovakia (Sk)218.314139.601116.104Finland (Fi)136.875101.84181.383Sweden (Sv)313.754334.060343.973United Kingdom (Uk)1.124.4321.080.4911.349.40216.993.03516.924.62316.037.692

The Hellenic Sugar Industry has also been making changes in Greece, with two of their five plants in Orestiada and Serres set to close, and some employees transferring to the remaining factory at PlatyImathias.

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The Hellenic Sugar Industry S.A. is the sole sugar producer in Greece, and it operates within the framework of the European Union's common agricultural policy. This policy is established by the Council Regulation 1234/2007, which governs the single common market organization for certain agricultural products, including sugar.

The company's main focus is on producing and trading white crystal sugar and its by-products. The EU sugar sector underwent a significant reform in 2006, which included a 36% cut in the guaranteed minimum sugar price. This change took effect from the 2009/2010 season, with the new price set at 404.4 €/tonne.

The EU sugar quota was also reduced as a result of this reform. By the end of the 3-year restructuring process, the EU quota for sugar and isoglucose had been lowered to 14 million tonnes, with 13.3 million tonnes allocated for sugar.

Here's a breakdown of the EU sugar quota for various countries between 2006/2007 and 2008/2009:

Country2006/20072007/20082008/2009Belgium (Be)880.990815.032782.576Bulgaria (Bg)4.110Czech Republic (Cz)471.965351.203425.843Denmark (Dk)380.680384.672397.096Germany (De)3.289.1163.779.6873.816.846Greece (El)184.80678.388157.383Spain (Es)1.199.544763.209630.586France (F met.)4.084.6974.456.1054.167.723France (F Dom)286.969232.301255.741Italy (It)789.643835.106523.545Latvia (Lv)59.935Lithuania (Lt)96.624103.25677.518Hungary (Hu)385.885268.707106.728Netherlands (Nl)913.478842.485920.239Austria (At)406.966369.288423.539Poland (Pl)1.676.8521.874.6721.347.910Portugal (Pt cont.)46.18114.154Portugal (Pt. Açores)1.8871.0061.000Romania (Ro)95.249112.557Slovenia (Sl)43.442Slovakia (Sk)218.314139.601116.104Finland (Fi)136.875101.84181.383Sweden (Sv)313.754334.060343.973United Kingdom (Uk)1.124.4321.080.4911.349.402

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Hellenic Sugar Industry plans to invite international bids for its sugar plants in Serbia, with a focus on attracting global industry leaders from Brazil or Germany.

The value of the two Serbian refineries has grown to about €100 million over the past two years, making them an attractive target for potential buyers.

Austria's Agrana has been mentioned as a possible suitor, but according to Hellenic Sugar's spokesperson, Christos Alexopoulos, Agrana has not expressed interest in the acquisition.

Agrana, owned by Germany's Südzucker, Europe's largest sugar producer, has instead focused on forging a strategic partnership with shareholders of Serbia's biggest sugar firm, Sunoko.

Sunoko, part of the MK Group, has been expanding its presence in the Serbian market by acquiring sugar refineries, including Star Šečer's TE-TO plant.

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Two Hellenic Sugar Plants in northern Greece are shutting down, with one factory remaining open in PlatyImathias.

The two factories in Orestiada and Serres will be closed, affecting the local economy.

Employees who are transferred to the remaining factory will work in the harvesting of sugar beets and will be transporting them to the plant in Platy.

The company expects to save significant funds by using cheaper fuel and reducing labor costs.

The employees who will remain with the company will work in the harvesting of sugar beets and will be transferring them to the plant in Platy, in Imathia.

The two factories will save the company 8 million euros by changing fuel for the operations, as natural gas will be replaced by liquefied gas that costs less.

Some employees will be given the option of joining a voluntary exit program, but the employees have expressed their opposition to this plan.

The closing of the two factories will have a dramatic effect on the economy of the areas in Serres and Orestiada, according to the opposition party SYRIZA.

A table summarizing the key points: