Akzente 01/2013 - February 2013 - EN

Akzente

News from Nordzucker | Issue 1 | February 2013

Expectations exceeded

Sugar market regime – Hartwig Fuchs advocates extension until 2020

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excellent quarterly figures – interview with Dr Michael Noth

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Nordzucker in a good position

Stevia – one year on the market

Contents

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4 The campaign in the German Nordzucker factories came to an end at the Uelzen factory. We report on this on page 4.

16 Trolli GmbH produces all kinds of fruit gums. You can read their customer profile on page 16.

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NEWS UPDATE 04 Beet campaign remains at previous year’s level 08 Quarterly report – glowing figures 10 “We need the sugar market regime until 2020” – comment 11 SERIES: Profitability plus: New compressors in the Uelzen factory 11

Group-wide farmer survey starts in February

BEET 12

SERIES: 20 ·20 ·20: Harvest loss monitoring

MARKETS AND CLIENTS t

13

SteviaSugar appeals to new customer groups

14 Stevia – one year on the market – interview 16

Customer profile: We visit Trolli GmbH

18

Spotlight on the market

COMMUNITY 20

Recipe: Spiced cocoa with SteviaSugar

Imprint Published by: Nordzucker AG, Küchenstrasse 9, 38100 Braunschweig, tel. +49 (0)531 2411 348, fax +49 (0)531 2411 378, akzente@nordzucker.de Editorial team (ed.): Bianca Deppe-Leickel (bdl), Susanne Dismer-Puls (sdp), Oliver Ditsch, Frank Knälmann, Dr. Klaus Schumacher (kds), Marion Stumpe (ms), Nina Tatter (nt) | Layout: Sieler Kommunikation und Gestaltung GmbH, Frankfurt | Printed by: Leinebergland Druck GmbH & Co. KG, Alfeld Image credits: Fotolia, Boris Kuster, Uli Lücke, Günter Nimptsch, Nordic Sugar (Apelöga), Nordzucker, Thomas Preuß, Trolli GmbH

2

Editorial

» “The discussion surrounding the extension of the sugar market regime has taken on a much more urgent tone, and we continue as before to fight for an extension of the SMR until 2020.”

Hartwig Fuchs

Dear Shareholders, Dear Readers, At the end of January 2013 we once again brought an excellent campaign to a close with high beet volumes, good sugar content and a high general level of sugar production within the Group. It is encouraging that we have been able to conclude the campaign at such a high level after last year’s stellar campaign, because we all know that what happens on the field is not something that can be entirely influenced – weather certainly plays a decisive role. While problems cropped up here and there in comparison to the previous year, the bottom line of this campaign remained very positive.

It is becoming apparent that we will likely also close this financial year with excellent earnings figures. Still, we must not be blind to the events currently unfolding in Europe. The past months have been marked by a growing uncertainty on the markets. Added to this is the economic crisis in Southern Europe, which is far from overcome and has an effect on the export business of our customers.

The result of both is a lack of clarity in how the economy of the EU will develop in the coming months.

For the second consecutive year, global production of sugar was well below global demand – a situation that has influenced prices internationally. The markets in which we operate are still highly volatile. We have developed a strong position on the market and in terms of finances in the midst of this environment by managing conservatively and reducing debt. We now have to maintain and expand upon this position. The discussion surrounding the extension of the sugar market regime, which affects all topics, has taken on a much more urgent tone, and we continue as before to fight for an extension of the SMR until 2020.

The sugar market in Europe will not be able to grow in the coming years, but the demand for sugar in other regions will increase. We will therefore look beyond the European horizon and determine if we can participate in this growth. If we want to be successful in the long term, it will be necessary to do more than just find and carry out the right projects. We also need to continuously keep the company healthy enough for the international markets and to face the challenges that await us. And we’re working together to achieve this.

Best regards,

Hartwig Fuchs

Akzente 01/13

3

NEWS UPDATE

Titel

Beet campaign remains at previous year’s level Excellent beet harvest processed. Benefits of early sowing, excellent yield ­d evelopment and perfected beet logistics. Land use efficiency, logistics and energy remain on the agenda

Dr Niels Pörksen Chief Agricultural Officer

» “Early sowing, optimised production equipment and perfected beet logistics are key to maximising yields. The early sowing of the sugar beet went excellently in almost all regions in 2012. This allowed for a long vegetation period, and we were able to begin with the beet harvest and campaign early.”

4

Having two consecutive campaigns end with similar success and practically iden­ tical sugar yields is a true rarity. At the end of January, Nordzucker managed to close the 2012/2013 campaign by meeting the high level of the previous year. For this issue of Akzente, we asked around in the growing regions and fac­ tories about the first results and what was so special about this campaign.

Beet farmers need less field space After an early campaign start and with an ­average of 125 days, Nordzucker brought the 2012/2013 beet processing to a close.

With mostly favourable harvest conditions and good quality beet, high sugar yields that exceeded expectations were achieved on the whole. “With superb teamwork, we

NEWS UPDATE

»

“After the campaign got off to an early start, the weather provided us with the best possible conditions for a very good harvest and high beet quality. Our largest investment project to date, the new juice purification plant, worked perfectly and contributed to the very good quality of the sugar. With just a few disruptions and thanks to good weather conditions, our campaign went relatively smoothly.”

Zoltán Tóth Director Clauen

» Janusz Nożewnik Director Opalenica

» With largely favourable harvest conditions, high sugar yields were achieved on the whole.

managed an excellent harvest to be sent to the factories for processing,” summarised Chief Agricultural Officer Dr Niels Pörksen.

“We achieve very good sugar yields on average, but beet yields have varied more than in the previous year, and not just among the growing areas,” he explained. “There were also measurable differences among plots of land belonging to the very same farmer.” He stated that Nordzucker had already achieved measurable progress in land use efficiency in just the second year following the launch of the 20 · 20 · 20 initiative. “A growing number of our farmers now need less land in the long term to achieve the same harvest yield.” This is a positive trend that is also important for planning cultivation in 2013, emphasised Dr Niels Pörksen. He praised the perfect cooperation of the farmers, harvest-

“The Opalenica factory completed its longest campaign in over 30 years after 121 days. For the second time running, we have exceeded the 100,000 tonne mark. There were record yields in our growing areas in 2012. Never before have our farmers managed to achieve peak yields of 77 tonnes of beet per hectare. After smaller initial problems, the factory ran smoothly and without any serious difficulties. Our employees are particularly proud that they managed to work through the entire year without any accidents.”

“We had a great campaign with an excellent and stable level of production. We did, however, have to overcome a number of challenges towards the end of the campaign, as frost had damaged some of the beet. Our employees have demonstrated their full commitment – not least in filling our warehouse with the largest amount of sugar that we’ve ever had in Nykøbing.”

Aksel Føns Johnsen Director Nordic Sugar Nykøbing

ing groups, hauliers and beet offices as being “successful in every respect”. He assessed the organisation of the beet covering in Northern Germany and Poland as “almost exemplary”, enthusiastically adding that “it really went excellently”. “The beet was dry when it a­ rrived in the clamp and was quickly protected in its entirety against frost and snow. This is how it should be, this is the role model – for other regions as well!”

Nordzucker factories run stably with high output Chief Operating Officer Alex Aumüller also expressed his satisfaction with the “largely very good campaign”. “Aside from the steam pipe explosion in Örtofta and the ­recurring failures of the boiler control system in Uelzen, where thankfully nobody was

injured, we only had a few notable technical problems. The factories provide stable supply with high output and an overall very high beet quality. In terms of logistics, energy savings and waste water treatment, we have made important progress with the new evaporation dryer in Uelzen, the new sugar silo in Kèdainiai and modern waste water equipment in Nordstemmen, Klein Wanz­ leben, Opalenica and Kèdainiai. All in all, we almost achieved the record production result from 2011/2012,” Axel Aumüller summarised. Nordzucker processed a total of 17.3 million tonnes of beet (previous year: 18 million) throughout the Group.

“The beets were still growing in the clamp,” said Axel Aumüller with a smile on his face.

“At least, that’s what our staff said about this campaign. Our entire team did superb >>

Akzente 01/13

5

NEWS UPDATE

Axel Aumüller Chief Operating Officer

» “Nordzucker has completed what is largely a very good campaign. I find it particularly encouraging that long campaigns such as these are no longer an issue for our team and that we are in a much better position to overcome the demands associated with it than we were some years ago.”

CONTINUATION FROM PAGE 5 „Beet campaign remains at previous year’s level“

work, in particular in overcoming tough ­logistical challenges in 2012/2013.”

There were only isolated problems with the quality of the beets following periods of frost and thawing towards the end of the campaign in Germany, and especially so in Denmark. This was because clamps were partly or insufficiently protected.

“If we receive large quantities of thawed, modified beets, then the output in the factory sinks drastically. Energy requirements and the use of extra materials rise.

And this, in turn, puts the brakes on costeffectiveness,” said Axel Aumüller, explaining the importance of protecting clamps.

Strong growth in Poland and Lithuania Peak averages of over twelve tonnes of sugar per hectare were achieved by the beet farmers in Germany, Poland and Denmark. Nordzucker reported encouragingly high growth in Poland and Lithuania in 2012. With an average of 12.7 tonnes of

Around 17.3 million tonnes of beet were processed Group-wide throughout the campaign.

6

sugar per hectare, the Polish farmers were at par with the equally very good yields of their North G ­ erman colleagues for the first time in their fourteenth year of their partnership with Nordzucker. “Advice, a good selection of v­ arieties, early sowing. It all came together perfectly in Poland this time,” said Dr Niels Pörksen. “We are particularly glad that Lithuania has performed so well and has had such good yields that even beat the positive result in Sweden.”

Central Europe – top yields don’t always require great weather In Central Europe, the campaign ended on 23 January in Uelzen after 133 days of processing. Managing Director Dr Michael Gauss highlighted the high level of operating uptime of the five German factories and the positive transport conditions that enabled this rapid processing. “We overcame technical problems with the boiler house control system and mash preparation in one of our factories,” said Michael

The campaign ended after 133 days in the five ­factories in Germany.

Gauss. For Volker Bückmann, Head of Beet Procurement, the beet has proved in 2012 “that it is the highest-yield culture on the field, even when weather conditions are not at their best.” Farmer Henrik Hoffman from Meine 2012 can empathise with this sentiment, having achieved 13.5 tonnes of sugar per hectare. “It’s our best result yet.” Henrik Hoffmann is proud of the high sugar yield of his beet, coming in at just under 18.5 per cent. “Our deliveries on 11 January were also noticeably good, with a good quality beet under the protective sheeting.” The entire logistical handling of the beet, including the covering of the clamps, worked very well in 2012, said a satisfied Volker Bückmann.

Wider clamps and loaders were now in use in almost all regions, he said. The smaller surface and wider sheeting protected the beet better. For beet cultivation in 2013, the fields for each producer now had to be checked once again and the two positive harvests should not be forgotten.

Good yields in Denmark and Sweden The beet also successfully demonstrated its great potential in Denmark and Sweden, as reported by Jannik Olejas, Head of Beet Procurement in Northern Europe. However, the unusually high soil tare and adhering weeds in the Swedish and Danish factories sometimes caused problems with the beet slicers. According to Jannik Olejas, this was due to problems with combating weeds, something he said had been made more difficult with strict government restrictions and extensive application requirements. As a result, farmers have faced new challenges. In addition to combating weeds, the focus was also increasingly on the auto-

neWS UPdate

mated covering of the beet clamps presented in Denmark and used to limit frost damage at the end of the campaign.

Drops in Finland and Slovakia Finland saw considerable yield drops as a result of late sowing, a cold summer and a rainy harvest season. “Difficult conditions,” said Jannik Olejas, “that resulted in a short and sometimes arduous campaign.” The

Denmark*

2012

2011

Beet yield (t/ha)

68.3

73.3

Sugar content (%)

18.1

16.9

Sugar yield (t/ha)

12.3

12.4

135

138

Campaign length (d)

Slovakian farmers of Nordzucker were put to the test with the other extreme. “After a long summer drought, yields in Slovakia remained well under average,” reported Dr Gerd Jung for Beet Procurement in Eastern Europe. However, the very good result in Poland was able to more than compensate for these reductions, he said. “Very good processing conditions on the whole,” reported Joachim Rüger, Head of Produc-

2012

2011

2012

2011

34.8

48.0

Beet yield (t/ha)

72.0

64.1

Sugar content (%)

16.1

15.7

Sugar content (%)

17.6

18.1

Sugar yield (t/ha)

5.6

7.5

Sugar yield (t/ha)

12.7

11.6

58

89

114

102

Campaign length (d)

Poland

Campaign length (d)

2012

2011

2012

2011

Beet yield (t/ha)

69.1

71.2

Beet yield (t/ha)

47.8

63.5

Sugar content (%)

18.3

18.1

Sugar content (%)

16.8

18.7

Sugar yield (t/ha)

12.7

12.9

Sugar yield (t/ha)

8.0

11.9

133

130

80

111

2012

2011

2012

2011

Beet yield (t/ha)

62.9

51.2

Beet yield (t/ha)

59.3

62.9

Sugar content (%)

17.1

17.3

Sugar content (%)

17.1

16.8

Sugar yield (t/ha)

10.7

8.9

Sugar yield (t/ha)

10.2

10.6

129

115

Campaign length (d)

126

129

Germany

Campaign length (d)

Lithuania*

Campaign length (d)

Campaign results of Nordzucker Group.

»

Beet yield (t/ha)

Finland*

tion for Eastern Europe. “The Chełmża, Opalenica and Trenčiansca Teplá factories ran very smoothly under good conditions.” Thanks to the clamps being wellcovered, not even the brief frosty period in mid-December with temperatures as low as -15°C in Eastern Europe was able to cause much damage. n

Slovakia

Campaign length (d)

Sweden*

Susanne Dismer-Puls, freelance author

Ryszard Woś, farmer in Pawłówko, Poland

“I have been cultivating around 30 hectares of sugar beet for many years now, and it’s an important part of my farm planning. High yields of 12.7 tonnes of sugar per hectare were made possible in 2012 with careful cultivation and a little help from the weather.

What’s impressive about the sugar beet is its stable and high yields. This gives me good reason to be optimistic about the future, even though prices for competing crops are high.”

»

Henrik Hoffmann farmer in Meine

“In Meine, we cultivate sugar beet on a 25 hectare farm. 2012 brought the best result to date with around 13.5 tonnes of sugar yield per hectare. I was particularly pleased with the impressive sugar content of our sugar beet of just under 18.5 per cent.”

* As of 07/02/2013, preliminary data.

Akzente 01/13

7

NEWS UPDATE

Glowing figures Third quarter of 2012/2013 ends superbly tive. But it is hard to predict what effect the economic crisis in Southern Europe and the volatility in the global markets will have on our business. In addition, global sugar production has exceeded demand for the second year running. There is nothing as constant as change in the markets. We are currently in a pleasing position, but as we all know, the world is constantly changing. In the light of the good results we have achieved today, we will continue to prepare for the challenges of tomorrow.

Dr Michael Noth Chief Financial Officer

The ‘Profitability plus’ efficiency programme has been in progress for almost three years now. So far, Nordzucker has met all of its targets. Will Nordzucker continue to pursue the cost-cutting targets set until 2015?

Dr Michael Noth: Yes, definitely. Efficiency is not a matter of simply implementing measures and being done with it. It is a process

of continuous improvement – month for month, year for year. Nordzucker has achieved a great deal in this regard in ­recent years, but still we must carry on.

The finance department supports this process, but it is driven by all of the divisions, in particular production and purchasing.

Is the potential for cost-cutting not beginning to run out?

Dr Michael Noth: No, certainly not. Our sugar company has a great deal of experience to refer back to, which means costcutting may not be as easy as it is in younger industries. Still, our employees have many ideas that are worth implementing. Strategically investing where we can derive the greatest benefit plays an important role here. This is where we as the Executive Board come into play, calculating and analysing very precisely.

Nordzucker continues to put in an ex­ cellent performance. Earnings for the 2012/2013 financial year are again ­expected to be well above those of the previous year. CFO Dr Michael Noth ­explains the situation.

Dr Noth, Nordzucker performed excellent in every quarter of this year. Why is this so and, more importantly, will this continue?

Dr Michael Noth: We have indeed made good use of the opportunities that the market has provided us with in recent months. The last two campaigns went ­superbly. We profited from the measures we had taken in the previous years, concentrating on sugar and optimising our ­investment portfolio, and working continually on improving our cost structures with our ‘Profitability plus’ programme.

What’s next? Prospects for the European sugar markets appear to be good at the moment, and market development is posiPRION – the project to unify processes and IT systems – is currently being rolled out in Northern Europe.

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NEWS UPDATE

Excellent financial report for the third quarter 2012/2013 In the first three quarters of 2012/2013, significant growth in revenues and earnings were generated compared with the same period in the previous year. Across the Group, Nordzucker recorded revenues of EUR 1,871.9 million (previous year: EUR 1,476.9 million). Higher prices than in the previous year more than compensated for the slight decrease in volumes of quota sugar sold. For nonquota sugar, the exact opposite was the case: lower prices were more than compensated for by the higher sales volumes. At the same time, an operating result of EUR 439.2 million before taxes and interest was recorded (previous year: EUR 206.5 million). The net income for the period was EUR 315.5 million – a year-on-year increase of around EUR 176.5 million (previous year: EUR 139.0 million).

These superb developments were also reflected in the development of equity, which increased from EUR 912.1 million to EUR 1,265.8 million. The equity ratio rose from 43.6 per cent to 55.0 per cent. This puts the company in an excellent position, not least because net debt was reduced to just EUR 6.1 million (previous year: EUR 162.3 million). n

Are there differences among the countries regarding the implementation of efficiency measures?

Dr Michael Noth: Yes, there are. After all, different locations have different ­backgrounds, conditions and requirements as a result of their customers. While this does need to be t­ aken into consideration, comparisons between regions and applying best-practice approaches to other locations are also i­mportant for us. In this regard, we make consistent use of the advantages that a Europe-oriented company offers.

How does the introduction of a uniform IT system throughout the Group help to achieve company goals?

Dr Michael Noth: We are currently in the process of integrating Nordic Sugar into our IT environment and introducing uniform processes. This is a core requirement for unified management and extensive transparency within the Group. It also helps us to establish a good basis upon which we can optimise our processes ex-

Consolidated revenues

Equity

in EUR m

in EUR m

1,872

912

9 months 2011/12

9 months 2012/13

9 months 2011/12

9 months 2012/13

Consolidated net income

Consolidated net debt

in EUR m

In EUR m

316

162

139

6 9 months 2011/2012

9 months 2012/2013

tensively throughout the Group, thus enabling us to operate more efficiently, more effectively and more rapidly. The team that has been working on this project throughout the Group has been demonstrating enormous commitment.

When you started at Nordzucker, you had a great deal to do in respect of loans and liabilities towards banks – and the entire Executive Board had to make some very tough decisions that have paid off today.

The debt level of the company is now almost back at zero. What do you think is your main task today?

Dr Michael Noth: The finance department has the task of preparing for the future, much like any other division. For us, this means that we need to continue refining our ­employees and systems. We have accomplished a great deal, but we are nowhere near where we aim to be. Specifically for us, it is important that we are in a position to effectively finance the next growth steps. n

1,266

1,477

9 months 2011/2012

9 months 2012/2013

Important dates 29 Mai 2013 Publication of 2012/2013 annual report 2 Juli 2013 Union Zucker 09:00 Südhannover GmbH, shareholder meeting Atrium of the country ­estate Gräflicher Landsitz Hardenberg 9 Juli 2013 Nordharzer Zucker AG, 10:00 Annual General Meeting at the Stadthalle ­Braunschweig 10 Juli 2013 Nordzucker Holding AG, 10:00 Annual General Meeting at the Stadthalle ­Braunschweig 11 Juli 2013 Nordzucker AG, 10:00 Annual General Meeting at the Stadthalle ­Braunschweig

Interview conducted by Bianca Deppe-Leickel

Akzente 01/13

9

NEWS AKTUELL UPDATE

Hartwig Fuchs

“ We need the sugar market regime until 2020” The path for the future of the European Common Agricultural Policy will be laid in the course of 2013, which will also ­determine the fate of the EU sugar market regime expiring in 2015. The Agriculture Committee of the European Parliament has argued in favour of an extension to the sugar market regime until 2020. Together with the entire European sugar industry, Nordzucker supports the call to prolong the sugar market regime until 2020. A comment by Hartwig Fuchs:

a relatively scarce commodity on the EU food market due to a lack of imports.

The long-term planning of land used for beet cultivation which needs to be finalised

by June so that drilling can be done in March and harvesting in autumn – presents another challenge, and this planning is always a tightrope act. On the one hand, beet p ­ rices need to remain attractive so that beet cultivation remains com-

petitive in comparison to wheat and rapeseed. On the other hand, the production costs of sugar need to be as low as possible for domestically produced sugar to remain competitive with globally sourced sugar in the future. For this reason, the competitiveness of the sugar sector must continue to be improved, while also making it possible to protect against risks in the future. We need time to do this.” n

“There are good reasons to extend the sugar market regime to 2020. Sugar producers have not yet managed to digest all of the incisive consequences of the reform enacted between 2006 and 2009 in all a­ reas.

Around 80 factories throughout the EU were closed then. As a result, numerous farmers abandoned sugar beet cultivation and jobs were lost in the industry. The purpose of the reform was to concentrate sugar beet cultivation around favoured ­locations in Europe. Therefore, Nordzucker also concentrated its sugar production in those areas with the most favourable farming conditions for sugar beet. Our five German factories are located in the best farming regions in Northern Germany.

Here we produce sugar for the German and European markets together with our farmers in adherence to high social and environmental standards, while our costs – in particular energy costs – are above those of various cane sugar producers.

We ensure supply to our customers in the food and drink industry and, of course, to the customer in the supermarket. It ­became apparent how important sugar production is in Europe in the summer of 2011. At the time, sugar in the EU became 2013 will be a critical year for the EU Common Agricultural Policy.

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NEWS UPDATE

SERIES: Profitability plus

New compressors in ten days Uelzen factory moves the replacement of machinery forward Various machines in a sugar factory require compressed air, for example measurement and control equipment and dust extractors in the Service Centre. This is because when sugar is packaged in large quantities – packet by packet, bag by bag – fine sugar dust may settle on the machinery. This is why there are large dust ex­ tractors in the Nordzucker Service Centres. Five new compressors have been deployed at the 8.5 bar station in the Uelzen factory since September 2012 to supply compressed air. The replacement of the compressors was part of the ‘Profitability plus’ programme.

The installation of the new compressors was originally planned for 2013. “But there was the opportunity last year to switch out the compressors, and we did everything possible to get them set up a campaign earlier. You can’t just pick these compressors up from your local hardware store. It took four months to get them delivered. The actual replacement of the old compressors with the new ones then took just ten days to complete. This only worked because a great team really pulled together and because the installation was superbly planned,” Sven Buhrmann, director of the Uelzen factory said enthusiastically.

The cost of the five new compressors and their installation – including soundproof covers – was EUR 400,000. The equipment saves around EUR 198,000 a year, meaning that the machinery installed contributes considerably to the success of the ‘Profita­ bility plus’ programme in the Uelzen factory. It also contributes towards reaching the target of reducing energy consumption in

Putting the pressure on! The five new compressors conserve 20 per cent energy when generating compressed air, thus saving EUR 198,000 each year.

Uelzen by between six and eight per cent from 2011 onwards by 2020.

“Our old Mannesmann-Wittig compressors required 8.0 kilowatts a minute to generate a cubic metre of compressed air, while the new two-stage compressors only consume between 6.1 and 6.2 kilowatts. By using two frequency converters, unnecessary operation of the machinery can also be avoided. This means we are now using 20 per cent less energy when generating compressed air,” Thomas Preuss explained. Nordzucker is not only profiting from the reduced energy use and lower energy costs though. “The old compressors had been in use for 25 years, so they had to be repaired more often. We’re now making savings in maintenance costs while also improving the uptime of the equipment, because when the compressors needed to be repaired, this of course affected the machinery that is supplied with compressed air,” concluded Thomas Preuss. n nt

Feedback requested

The Group-wide farmer survey can be filled out directly online.

Group-wide farmer survey starts in February Nordzucker wishes to strategically improve its service for beet farmers even further and invites all farmers to actively participate in the 2013 farmer survey. The survey, sent to the entire Group with the same questions,

started in February 2013. Beet farmers in Poland will be receiving the anonymous survey at the winter meetings. Farmers in the other countries will be informed by Nordzucker by email. They can answer the questions directly online. As in 2011, the focus this year is on questions about the advice service, the quality and use of information services, and satisfaction with Nordzucker as a business partner.

Seven minutes to make a difference “The individual feedback of each beet farmer is very important to Nordzucker,” explained Dr Ulf Wegener, who is responsible for s­ trategic raw material procurement.

He ­expects to gain valuable input from the

survey results to improve Nordzucker’s communications and advice services as needed. The survey and its analysis are ­being handled by Dr Gerd Jung (Eastern Europe), Claus-Friso Gellermann (Central Europe) and Björn Windfäll (Northern ­Europe). Ulf Wegener is hoping for more resonance this year from Northern Germany in particular. In 2011, the response rate here was 22 per cent, compared to an admirable 50 per cent from farms in Lithuania and Sweden, where online surveys have become a feedback instrument of choice since 2007. “I think these ten minutes are worthwhile for everyone,” he says. He is confident that the German Nordzucker farmers will catch up in 2013. n sdp

Akzente 01/13

11

BEET

SERIES: 20·20·20

Separating the leftovers Nordzucker is keeping an eye open for avoidable losses when harvesting beets – in practical trials, North German harvester drivers have demonstrated encouragingly low harvest losses

As part of the 20 ·20 · 20 initiative, Nord­ zucker is investigating yield potential in ­order to increase the competitiveness of the sugar beet.– for example in harvest loss monitoring. The German beet offices have now been able to demonstrate en­ couragingly low harvest losses in practi­ cal trials. Following the conclusion of tests p ­ erformed over two harvests, it is apparent that Northern Germany’s farm­ ers and ­harvester drivers are leaving much fewer beets on the field than pre­ viously assumed.

How much beet is left unharvested in the soil after harvesting? “There were only rough values available for our region until now,” said Dr Andreas Windt, the head of Nordzucker’s cultivation advisory service in Germany, explaining the approach. “Those involved in the practical work believe that there are losses amounting to up to ten per cent of the harvest mass. Harvester drivers estimate losses – depending on the driver – to be even higher.” Losses from the beet harvest cannot yet be continuously controlled during the harvesting process, said Windt. No harvester manufacturer is yet offering the technology needed to achieve this.

Harvesting losses calculated accurately over two years Nonetheless, in order to create a perspective of and precisely quantify the actual harvest losses, student trainees Anja Reimers and

Anne Neuschrank performed and analysed practical trials on loss monitoring for two years for Nordzucker. To this end, the soil of harvested test land at a total of 33 different locations in Northern Germany up to a depth of 20 cm was sieved. This revealed leftover beet and parts of beet, which were weighed.

The lost parts were then added to the overall amount. A separator, a machine usually used to remove stones from arable land, was used for sieving.

On average, over one tonne of beet was left per hectare of field.

Overall, the losses calculated during the test were encouragingly low. In 2011, an average of 1.2 per cent of the beet yield was left on the field, which is equivalent to 0.97 tonnes of beet per hectare. In 2012, the average loss from unharvested beet was 1.41 per cent of the yield, or 1.21 tonnes of beet per hectare. “Of course, it will be interesting when we take a look at the spread and extreme values of the harvest losses found,” explained Andreas Windt. The individual ­results over two years range between 0.19 and 7.59 tonnes of loss per hectare, which corresponds to harvest losses between 0.4 and 7 per cent. Windt calculates from this that there are “around 200 Euros in difference per hectare between the best and worst harvest result.” This was roughly equivalent to the entire cost of harvesting for each hectare.

Once harvested from the ground, the parts of the beet are sieved using a separator.

The machine is usually used to remove stones from arable land.

Identifying and avoiding mistakes In addition to inconsistent conditions, harvesters that were set up less than ideally were responsible for the higher beet loss values. The health of the plants also affected harvest losses. Farmland which had been affected with root rot exhibited higher beet losses, for example. The affected beets were more brittle. A comparison of the beet harvesters of the four manufacturers involved in the test did not reveal any significant differences, however.

Always handle with care The random samples show that harvesting is generally performed almost ideally with minimal losses in Northern Germany. Dr Ulf Wegener also issued his compliments, calling it “a surprisingly good result.” For the Head of Strategic Raw Material Procurement, however, the good test results are no reason to confine the topic of harvest losses to the archives. “Nordzucker always aims to keep an eye out for avoidable harvest losses. Cursory glances and rough estimates will only help us so far. We are, of course, not going to be sieving through everything coming out behind a harvester,” he says with a laugh.

In terms of the ambitious yield targets of the 20 · 20 · 20 initiative though, adjusting the harvesting and cleaning equipment to the local conditions should play a predominant role. “Our test results help farmers and harvester drivers to develop more security and the necessary careful approach. n

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sdp

MARKET AND CLIENTS

SteviaSugar appeals to new customer groups Save calories, enjoy the taste of sugar 50 per cent of the calories of sugar per portion with the same volume.

SteviaSugar is offered in 500 gram packets in supermarkets. Supermarket chains are interested, which Oliver Ditsch finds encouraging. “The development of distribution has been extremely satisfying to date. “We are confident that our ambitious distribution goals will be met.” n nt

Since December, Nordzucker has been offering a new product for end consum­ ers: SteviaSugar – a combination of ste­ via and sugar. The product is currently being marketed in five countries under the SweetFamily and Dansukker brands.

It’s not only distribution that goes be­ yond national borders. Product develop­ ment too was the result of close coopera­ tion within the Group.

feiting the taste of sugar,” says Oliver Ditsch, Senior Manager Marketing & Sales Retail. This is made possible with the unique characteristic of the product.

To create SteviaSugar, steviol glycosides, the sweet substances of the stevia plant, are sprayed onto sugar crystals. Another tiny layer of sugar is applied to these sugar and steviol glycoside grains. Thus a product is created that only has around

The product was developed across multiple regions with Product Development and Innovation & Technology departments working closely together and is currently being introduced in Germany, Denmark, Finland, Sweden and Slovakia.

Production is taking place in the Swedish town of A ­ rlöv. The Nordzucker joint venture NP Sweet provides the stevia required for this. “Our SteviaSugar is the first product to be developed across multiple countries within our company. This makes it an excellent example of how Nordzucker is benefiting from its international nature,” concluded Board Member Mats Liljestam.

Steviol glycosides have been approved for use as sweeteners in the EU since the end of 2011. As stevia is of natural origin and virtually free of calories, it promises to be an attractive alternative to artificial sweeteners. Mats Liljestam considers this to be an ideal starting situation. “Our new product, SteviaSugar, is not competing against the household sugar we know.

Instead, it’s an addition to our portfolio, because it is directed at consumers of artificial sweeteners, not those of sugar.”

On the European market, SteviaSugar is the first product of its kind – a combination of stevia and sugar. Therein lies its advantage. “With SteviaSugar, we are targeting customers that actively wish to reduce their calorie intake while not for-

You can find recipe ideas in the “SteviaSugar” section of the SweetFamily website at www.sweet-family.de and www.dansukker.com.

Akzente 01/13

13

MARKET AND CLIENTS

»

„Stevia is an alternative to synthetic sweeteners, because it is aimed at those who wish to consume fewer calories without compromising on taste and also don’t want to use artificial products.“ Mats Liljestam Chief Marketing Officer

Interview

Stevia – one year on the market An alternative for the calorie-conscious consumer Steviol glycosides have been approved for use as sweeteners in the European Union for over a year now. Since that time, NP Sweet has been marketing Stevia to customers in the food and drink industry. In December 2012, ­SteviaSugar – a consumer product ­combining sugar and steviol glycosides – followed. It is marketed by Nordzucker under the brand names SweetFamily and Dansukker. A conversation with Chief Marketing and Sales Officer, Mats Liljestam:

Mr Liljestam, in March 2011 Nordzucker and Pure Circle founded the joint venture NP Sweet. NP Sweet was able to commence operations with the approval of stevia as a food additive in the EU. How has the position of NP Sweet developed on the market in the meantime?

14

Mats Liljestam: The market for stevia is of

course still relatively small. But our joint venture still holds a good position on this market. Together with another competitor, we hold a leading role in Germany and supply renowned customers from various segments of the food industry.

The expectations surrounding the new sweetener extracted from the stevia plant were very high from the start. Some even feared that stevia might compete with sugar. How has the market developed?

Mats Liljestam: We have always said that stevia is no competitor for sugar. It is aimed at those consumers who wish to cut their calorie intake without compromising on taste while also avoiding the use of synthetic products. The main advantage of stevia compared to artificial sweeteners is that it is a natural product.

But you are right when you say that expectations were high – both among producers and sellers of stevia and within the food industry. Looking at sales of s­ tevia, sales to customers in the food industry have so far remained below expectations.

This applies not only to NP Sweet, but also to our competitors. Customers have not switched from arti­ficial sweeteners to stevia in the numbers that we had hoped.

But I do consider this to be a normal development. In terms of the tastes we are accustomed to, we people are conservative – we like to stick to what we know. ­People don’t like to change familiar products when they are performing well on the market because they may no longer appeal to the customer if they taste ­different. It isn’t just about market share here. Ultimately, it’s about large sums as well. So it takes time for the first ones to

MarKet and ClientS

Steviol glycosides – the facts • Steviol glycosides: sweeteners obtained from the plant Stevia rebaudiana. Steviol glycosides have 200 to 300 times the sweetness of sugar and are virtually free of calories.

• EU approval: With EU directive 1333/2008 going into effect

in December 2011, steviol glycosides were approved for use in the EU as a sweetener in certain product groups.

• NP Sweet: Joint venture established in March 2011 and held equally by Nordzucker and Pure Circle, the Malaysian global market leader for stevia products. The purpose of the company is to market and develop stevia products. www.npsweet.com

Approved for use in the EU as a sweetener since 2011 – the sweetener obtained from the stevia plant.

come forward. The first companies have now successfully modified products.

Schwartauer Werke, for example, now use stevia instead of conventional sweeteners in their “Wellness” range of preserves, and are generating much better sales figures with them.

Or let’s look at Danone: Their yoghurt sweetened with stevia – Danvia – was initially supposed to be extensively tested in Austria until a decision was made as to whether it was to be introduced to the German market as well. After just half a year, it has arrived on shelves here as well. All this reveals a positive trend.

Are there other positive signs?

Mats Liljestam: Yes, there are indeed.

Interest is increasing both in the food industry and in retail. Customers are asking for products sweetened with stevia in

their supermarkets, and the supermarkets pass these requests on to their suppliers.

And so it has happened that our customers from the confectionery industry have approached us because they wanted to buy stevia from NP Sweet, even though a year ago they didn’t want to switch from artificial sweeteners to stevia. We then develop solutions together on how best to use stevia in the products.

Consumers are not only asking about preserves and sweets with stevia, they also want to use stevia itself as a sweetener.

This is why Nordzucker introduced SteviaSugar within its SweetFamily and Dansukker brands. With this combination of sugar and stevia, we offer our customers a lowercalorie product that is similar in taste to sugar. n

SteviaSugar is the first product developed Group-wide. It is distributed in Denmark, among other countries.

Interview conducted by Nina Tatter

Akzente 01/13

15

MarKet and ClientS

Trolli produces fruit gums in all forms.

A fruity, sweet scent – every turn of the drum causes a batch of fragrant gummy bears to drop onto the conveyor belt.

Customer profile

The taste of sweet and sour apples A visit to Trolli GmbH The town of Hagenow in Mecklenburg­ Western Pomerania – the huge magenta letting on the high­rack warehouse lets us know the manufacturer of the fruit gums here, namely Trolli. Germany’s second largest producer of fruit gums and foam sweets produces fruit gums in all shapes and flavours here, from sour worms, wine gums and gummy bears to sweet and sour peach and apple rings. And soon their Head of Production, Björn Ahrendt, will show me how.

The Mederer Group, which Trolli GmbH is part of, produces around 125,000 tonnes of fruit gums each year worldwide, and around 160 tonnes are produced each day in Hagenow. We start in what is known as the ‘kitchen’. Here the base mass for fruit gums is produced by pressurising glucose syrup, gelatin, sugar and

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water. This gooey, colourless, sweet mass is the base substance for most of the types of fruit gums in Trolli’s range. But this base mass alone does not make an apple ring. The ingredients that turn the hot liquid base mass into the liquid fruit gum mass for gummy worms, for example, are added at the mixing station. “It’s the aroma and the colouring that define the taste and appearance. I can also use the acid to tailor it a little more. I can set how sour the product is and how quickly the sour taste develops while eating it.

The sourness also brings out the fruity taste in particular.

After all, an apple, as sweet as it may be, also has a slightly acidic taste. That’s what we create here,” Björn Ahrendt explains.

One level below the mixing station, hundreds of red and yellow Trolli glowworms are going through the casting machinery.

They are still in ‘moulding powder’ – a white starch powder – on their boxes.

“The gum figures are poured in liquid form into the moulding powder. The boxes are first filled with the moulding powder in the casting machine. This is then smoothed out and a stamp creates an impression of the mould in the powder. This recreates a negative mould for each box of worms, bears or rings. The advantage of the powder is that the fruit gums don’t stick to it and so it can be used again and again,” continued Björn Ahrendt.

These worms, bears or other shapes, which are now liquid, must first be allowed to cool off and set. To this end, the boxes are stacked on pallets and brought to the drying room. Each product has its own setting time. Bears and rings need to spend many hours in this room before they can be processed.

“The setting time, the type and quantity of gelatin determine how soft or firm a product will be,” Ahrendt explains. While

MarKet and ClientS

Facts and figures Trolli GmbH Quispiam Efficax impiger, quo Kundenbilder cos Hanc rectum upilio pyus abico.

● Germany’s

second-largest manufacturer of fruit gums and foam sweets ● Founded in 1948 in Fürth by Willy Mederer ● Three production facilities in Germany, with sites in three other countries as well ● More than 1000 employees in Germany, of which 400 in Hagenow ● Produces 125,000 tonnes of fruit gums each year worldwide ● Revenues: EUR 240 million each year worldwide

While the company originally produced confectionery such as peppermint fondants and cream chocolates, they switched to a range of fruit gums in the 1970s.

the fruit gums are being brought to their storage positions using forklifts, Björn Ahrendt and I head off to the next hall.

This is where peach rings are given their characteristic sugar coating. The forklifts bring them from the drying room to the casting machine. Here the powder is removed and a conveyor belt brings the rings to a type of drum, in which they are given their sweet-yet-sour sugar coat-

ing. Once the rings have dried, the sugar sticks to them and they can be packaged.

We continue past other production lines where different types of fruit gums are manufactured before we arrive in the packaging section. From here we have a good view of everything and can see the various packaging machines. Some are fully automated while others have employees standing at them, placing the packed bags

With a production facility in China, Trolli supplies the markets in Asia and the Middle East.

A success story since 1982: Trolli’s apple rings.

in boxes. There are machines that pack gummy bears in bags, others pack wine gums while another packs Trolli mixtures into tubs. Large jug scales are currently being used to pack peach rings. We go up onto a platform, where scales are used to weigh out the right quantity of peach rings for each bag. 200 grams of peach rings are weighed out at a time before being sent downwards in portions. There a machine forms a tube using a roll of foil. This tube is sealed on the rear and lower sides, packed with rings and then sealed twice on the top.

The machine then separates the bag from the next. Together with other bags, our bag is packed in a box, placed on a pallet and transported to the high-rack warehouse. It won’t take long for the peach rings to be delivered to a supermarket with other fruit gums. n nt

Akzente 01/13

17

MARKET AND CLIENTS

SPOTLIGHT ON THE MARKET

Focus on biofuels Biofuels such as bioethanol or biodiesel play an important role in environmental protection and energy supply. However, bio­ fuels have increasingly become a topic of public discussion of late with respect to the greenhouse gas emissions arising dur­ ing production and in terms of the competition they present in their use for food and animal feed. Wheat, oil seed and sugar markets have been increasingly affected by the developments on the biofuels market, most notably because they will contin­ ue to be strongly dependent on the political situation in the future.

Of the 102 million cubic metres of ethanol produced worldwide in 2012, around half – 52.5 million cubic metres – was produced in the USA, followed by Brazil with 23 per cent or 23.6 million cubic metres (source: Conab) and the EU with 6.6 million cubic metres or 7 per cent of global production (source: F.O. Licht).

While ethanol production in the USA and EU is largely based on maize and wheat, sugar cane is the primary source for production in Brazil.

Therefore, it is no surprise that developments on the global bioethanol market are increasingly important to the sugar market.

Two developments in 2012 were of particular interest to the bioethanol market:

Ethanol production 2004 – 2013

Lower harvest and high sugar price cause ethanol production to shrink in Brazil Due to a drop in sugar cane harvests, ethanol production in Brazil fell in 2012 by around 3 per cent as against 2011 to 22.4 million cubic metres (2011: 23). Additionally, the high price of sugar caused more sugar cane to flow into sugar production at the expense of ethanol. This led the government to reduce the national mandatory additive quotient from 25 per cent to 20 per cent. The state supply company Conab expects a rise in sugar production of just under 5 per cent to 37.7 million tonnes (2011/2012: 36), while a decline of 5 per cent to 23.6 million cubic metres (24.8) has been forecast for ethanol in the 2012/2013 financial year (April/March).

The Brazilian government is now planning to increase the mandatory additive quotient back to 25 per cent, and it is also being discussed whether the tax on ethanol should be reduced. However, another reason for the relatively slow development of Brazilian ethanol production at the moment is the price of vehicle petrol, which is subsidised by the government and is maintained at below cost. For this reason, ethanol producers are hardly able to pass on the increased commodity costs to consumers without losing their competitive edge against petrol. Deregulation of petrol prices, an increase in the additive quotient and a reduction in ethanol tax would boost demand for ethanol. It is yet to be seen

Proportion of raw materials in global ethanol production 2012

In 1000 cubic metres

Wheat 6%

60,000 50,000

Mollasses 5%

40,000 30,000 Corn 63 %

20,000 10,000

Sugarcane 25 %

0 2004

2005 USA

Source: F.O. Licht

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2006

2007 Brasil

2008

2009

2010

2011

2012

2013*

EU *Estimate

Others 1%

MARKET AND CLIENTS

In 2012 around 6.6 million cubic metres of ethanol were produced in the EU. This represents 7 per cent of global production.

how this would affect domestic sugar production and, consequently, the global sugar market.

Ethanol production in the USA fell by 3 per cent to 52.5 million cubic metres in 2012 (2011: 54.2) due to the poor maize harvest brought on by drought conditions. As a result, the country was forced to import more ethanol in order to satisfy the national mandatory additive quotient as per the Renewable Fuels Standard (RFS). This standard requires the proportion of biofuels (biodiesel or bioethanol) to be increased in the transport sector to up to 136 million cubic metres by 2022. With the current production capacity of around 57 million cubic metres (source: Renewable Fuels Association), it is questionable whether this goal can be reached over the course of the next decade. The higher maize prices caused by the drought has led to public criticism of the RFS because over 40 per cent of the harvested maize (around 114 million tonnes) was used for ethanol production despite market shortages. This caused uproar against the RFS from milk and meat producers in particular due to heavy increases in animal feed prices.

Mandatory additive quotient under discussion A change to the mandatory biofuel additive quotient is currently being discussed in the EU in the light of the ‘tank vs. table’ debate. The EU Renewable Energy Directive (RED) 2009/28/EC is based on the goal of achieving a share of 10 per cent of renewable energy in the transport sector by 2020. In the EU, around 9 million cubic metres of biodiesel are produced from 7.68 million

tonnes of vegetable oil (26 per cent of the total produced quantity of 26.6 million tonnes [source: Fediol, figures for 2011]) For the 6.6 million cubic metres of bioethanol produced, around 4.6 million tonnes of wheat (3.7 per cent of the entire produced quantity of 123 million tonnes [source: European Commission DG AGRI 2012/13 forecast]), 3 million tonnes of maize (5.4 per cent of 55.4 million tonnes [source: European Commission DG AGRI 2012/13 forecast]) and around 15 million tonnes of sugar beet (13.6 per cent of the total produced quantity of 110 million tonnes (source: EU Outlook 2012)) were used.

The issue of indirect land use change (ILUC), has increasingly been the focus of public discussion in relation to the production of biofuels. Due in particular to this problem, the European Commission presented a proposal in September 2012 wherein the proportion of first-generation renewable energies – those that compete with foodstuffs – would be reduced from 10 per cent to 5 per cent. This proportion was already at around 4.5 per cent in 2011. This means that there is very little growth potential to be expected in the EU for first-generation biofuels.

The political situation regarding biofuels will also be subject to considerable uncertainty in the near future, both in the EU and in other primary production nations. Due to market dependencies, the future performance of the biofuel market will also have repercussions for the sugar market. Past fears that the additive quotient in Brazil in particular would have a significant effect on global sugar prices have not been realised to the extent previously expected. n

Dr Thordis Möller, Economics

Akzente 01/13

19

Spiced cocoa Ingredients:

50 g dark chocolate 400 ml semi-skimmed milk ar 1 tsp. SweetFamily stevia sug 1-2 pinches of cinnamon 1 pinch of ground cardamom

Preparation: Finely chop the chocolate and heat with 300 ml of milk in a saucepan. Stir continually to dissolve the chocolate. Mix in SweetFamily stevia sugar, cinnamon and cardamom.

Heat the remaining 100 ml of milk in a saucepan, remove from the stovetop and beat using a milk foamer. Pour the spiced cocoa into mugs, spoon the milk foam onto it and serve immediately.

Preparation time: Approximately 10 minutes Per mug approximately: 208 kcal 5.9 g fat 28.7 g carbohydrates 9.4 g protein

d more tips an You can find r e pes und delicious reci

e

-family.d www.sweet