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Cosun strengthens position in the sugarmarket

21 July 2006

Royal Cosun strives at a sustainable Dutch sugar sector, which will be able to prove itself at the European level. The announcement earlier today that CSM intends to sell its sugar division to Cosun fits in with Cosun’s strategy of strengthening the position of its sugar company Suiker Unie in the international sugar market. Partly as a result of the reform of the European sugar market organisation, cost price has become a crucial factor in the European sugar market. By combining resources a further reduction of the cost price can be achieved.
 
Sugar producers Suiker Unie and CSM Suiker have a market share of about five percent in Europe, and complement each other very well. Synergy effects can be achieved primarily in the fields of organisation, production and logistics. On the European level the merged company will be able to play a more prominent role. Last but not least, the acquisition fits in with the company’s aim to retain a sustainable and profitable beet cultivation and sugar industry in the Netherlands.
 
As to the consequences of the planned takeover, it is clear that the beet processing capacity of the three sugar refineries (Groningen, Hoogkerk and Dinteloord) is needed.  No closures of these production facilities are to be expected as a consequence of this transaction. At present no information can be provided on how the other activities of CSM Suiker and Suiker Unie will be merged.
 
Cosun and the CSM growers’ federation NBF have discussed the topic of joining the cooperative including the details of how, and under which conditions, they can do so. Cosun is in favour of the CSM growers joining the cooperative, as this will avoid any uncertainty concerning rights and obligations and will put the mutual relationship on a clear footing. We will announce the details as soon as the decision-making process is complete.
 
The Social and Economic Council of the Netherlands (SER), the sector organisations and the relevant works councils have been informed of the developments. In addition, the Netherlands Competition Authority (NMa) has to approve the takeover. We are confident that there will be no objections to the acquisition of CSM Suiker by Cosun.