Spanish food group Ebro Puleva has confirmed that it will be forced to close three sugar plants in order to survive EU reform of the sector.
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The closures had been rumoured with a union official at Ebro Puleva telling just-food last week that the company was “seriously considering” the moves.
However, Ebro Puleva today (31 October) confirmed that three sugar factories are facing the axe as the company moves to counteract the reform of the EU sugar market.
The reforms have led to volumes falling at Azucarera Ebro, Ebro Puleva’s sugar arm. The company has said its sugar quota will be cut by 50% to 400,000 tonnes a year.
Ebro Puleva has looked to boost its quota back up to 800,000 tonnes through a new refinery and a joint venture. However, the company has deemed the closure of three sites necessary.
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By GlobalData“As a result of the 50% reduction in crops and without prejudice to the restructuring map finally established, we will foreseeably have to close three of our sugar factories,” Ebro Puleva said today.
Some 400 jobs are under threat. The three plants employ 800 workers Ebro Puleva has pledged to save 400 jobs by transferring workers to rice or biofuel manufacturing plants.
The EU moved to reform the sugar sector last year in a bid to stem over-production and lower artificially higher prices for EU sugar. Sugar producers who were uncompetitive at the lower price levels were offered financial inducements to leave the industry.
However, the EU has been forced to sweeten these inducements as far fewer producers leaving than predicted.
