Strategy

Since the company was founded in 1997, Nordzucker has focused on growth in its core sugar market. Consolidation of the North German sugar industry was followed by several acquisitions in Eastern Europe. Nordzucker pursued its growth strategy with the purchase of Nordic Sugar in 2009 and is now the second largest sugar producer in Europe.

After restructuring its investment portfolio in 2010 and 2011, the Group is initially concentrating on its core business: the production and distribution of sugar. The Nordzucker Group benefits from its strong market position in the EU. Further reinforcing this position remains its overriding corporate objective. In addition, the company reviews growth opportunities outside Europe. The focus is on attractive growth regions such as Africa and Asia, because demand for sugar is growing rapidly there – in contrast to the EU. These reviews are aimed at preparing the company to move into the production of cane sugar and to build a regional sugar marketing organisation in order to develop an additional high-potential business area. The objective is to sign cooperation agreements with local, national or international partners. A final decision on an actual commitment and the associated issues, such as the construction of production facilities, for example, had not been made at the time the consolidated financial statements and Group management report were prepared, however. Projects outside Europe not only bring considerable growth opportunities, but also new challenges. The Executive Board is therefore reviewing these opportunities with particular care.

In response to growing demand for natural sweeteners, Nordzucker also sells products containing stevia, a plant-based sweetener, in addition to sugar.

Sustainable business determines all the workflows throughout the company. Long-term success can only be secured by running a sustainable business and by including environmental protection, energy efficiency and social aspects in business decisions. Product safety and occupational health and safety also have a high priority within the company. Nordzucker sets itself ambitious targets in all areas of sustainability, which result in continuous improvements. It is particularly important to include the entire process chain, from the beet to the customer, in the sustainability assessment.

Nordzucker’s aim is to offer high-quality products and first-class service at a reasonable price. Only by providing consistently high quality can Nordzucker retain the loyalty of its customers as competition grows even more intense. Nordzucker therefore sets great store by customer orientation, individual solutions, great flexibility and dependability of supplies. Its broad product range, which includes a wide assortment of speciality products, also adds value for customers.

Continuous efficiency improvements along the entire value chain are driven by wide-ranging projects throughout the Group. Efforts are particularly focused on steps to achieve lasting increases in the yields from beet farming. The aim of the 20 · 20 · 20 project is for 20 per cent of beet farmers to achieve a yield of 20 tonnes of sugar per hectare by 2020, because it is vital to make sugar beet even more competitive in comparison with other crops, so as to safeguard beet cultivation in our regions for the long term. The 20 · 20 · 20 project includes activities in the areas of research, cultivation advice and communications.

The five-year efficiency improvement programme ‘Profitability plus’ has been under way since 2009/2010 and has also delivered cost reductions in all areas of the company. The savings target of EUR 67 million was achieved in the financial year 2013/2014, a year earlier than planned. Major investments in the production process made a key contribution, especially those aimed at saving energy. Significant improvements were also made in the purchasing of energy and technical services. Another focus of our work in recent years has been the harmonisation and optimisation of business processes and the integration of the IT environment for the whole Group, which all contribute substantially to lasting improvements in the company’s competitiveness. All the efficiency programmes are aimed at preparing the company for the changes to the market and competitive situation that will take place after 2017.

Sustainability, a focus on customers and markets, and efficiency gains strengthen the company’s market position and enable additional growth in the core business. Nordzucker’s goal is not just to develop its excellent position within Europe, but to open up new growth areas outside Europe at the same time. Both are necessary to ensure long-term profitability and further growth.