Nordzucker to invest 100m euros in Swedish sugar production

Nordzucker will consolidate its sugar production in southern Sweden, closing one factory and investing €100 million in another.

The company will close its refinery in Arlöv, north of Malmö, moving production to its plant in Örtofta 20km away. To make way for the extra capacity, Nordzucker will invest in Örtofta’s production methods and technologies, as well as an investment in the environment.

The first steps have already been taken with an extensive modernisation of Örtofta’s sugarhouse, which will be completed before the 2019 campaign. In the years to come, the investments will include building a high rack warehouse, rebuilding Nordzucker’s service centre, and adding a new liquid and syrup facility.

The entire project is expected to be completed in autumn 2021.

“We have come far in the planning and I look forward to being ready for the next stage,” said Nordzucker’s chief operations officer, Axel Aumüller. “With the consolidation, we not only ensure a long-term sustainable structure in Sweden, we also get a modern factory with efficient energy-optimised production and significant savings in the long term. [It is] an important step to position ourselves as a stable, profitable and competitive player in the sugar market.”

Katarina Silfversparre, managing director for the Swedish subsidiary Nordic Sugar, added: “I am very pleased that on the basis of this decision, we, in close cooperation with our beet growers, ensure the deliveries of Swedish sugar to our customers for the future. The consolidation will mean a reduction in the number of employees in the Swedish operations. It means a lot to me that we can handle this and the closure of the factory in Arlöv with internal relocation and natural retirement.”

The investments mean that energy consumption in Nordzucker’s Swedish sugar production can be reduced by 20%, and CO2 emissions by 18,000 tonnes per year. In addition, more rational logistics mean that transport by truck can be significantly reduced, with an increased part of the transports being done by rail.

Together with a silo inaugurated in 2017, and the energy-efficiency measures implemented in Örtofta in recent years, the new investments mean that the company has invested around €150 million in strategic projects to secure the competitiveness of its Swedish sugar production in the future.

It comes at a time of intense pressure for global sugar processors, in the face of universal backlash from health-conscious consumers.

Many producers are finding alternative ingredient categories, driving efficiencies, or consolidating their operations to secure a more viable future.

But Nordzucker is still planning for growth, too: in February, it announced a deal to
acquire a 70% stake in Australian sugar producer Mackay Sugar, giving it access to important Southeast Asian markets.