Denmark-based ingredients giant Danisco has set the ball rolling for the spin-off of its sugar business, the company said today (4 March).

Danisco is looking to position Danisco Sugar as an independent entity and is hoping to complete the move by the end of the year.

"Danisco Sugar has a compelling future as an independent entity due to its strong cash flow generating characteristics that result from it having one of the most efficient sugar production platforms in Europe," said CEO Tom Knutzen.

EU reform of the sugar sector has hit the continent's sugar industry in recent months but Danisco is optimistic its business will see sales and margins improve this year.

The EU has renounced 2.5m tonnes of sugar in its latest round of sugar reductions, with a further cut expected by the end of March.

"We now anticipate greater clarity for the EU sugar market, and an improved balance between demand and supply," Danisco said.

"As a result of the improved sugar industry outlook, we raise our long-term financial target for Danisco Sugar to revenue of at least DKK6bn (US$1.2bn) and an EBIT margin - before special items and share-based payments - of at least 10%, to be achieved after the full implementation of the EU sugar reform."