February 14, 2019 / 4:27 PM / 9 months ago

UPDATE 1-Suedzucker's Saint Louis to cut sugar output in France

(Adds details, Suedzucker group comment)

PARIS, Feb 14 (Reuters) - French sugar company Saint Louis Sucre said on Thursday it will end production at two factories in France as part of a wider restructuring plan at its German parent Suedzucker, Europe’s largest sugar refiner.

Saint Louis Sucre will stop production at its Eppeville and Cagny sites, while production will continue at two other French sites, a spokeswoman said.

“We will do the 2019/2020 campaign with four sugar units and the plan will be implemented in the first half of 2020,” Saint Louis Sucre’s spokeswoman said.

A spokesman for Suedzucker in Germany said the French closures are part of the group’s restructuring plan for its sugar sector which may include cutting up to 700,000 tonnes of annual production capacity.

In January it announced the closure of two plants in Germany with a combined 200,000 tonne capacity.

The two French plants to be closed have a combined capacity of around 450,000 tonnes, the Suedzucker spokesman said.

“With the two closures in Germany – 200,000 tonnes — and the closures in France the goal of 700,000 tonnes production reduction has not yet been reached,” he added.

Saint Louis Sucre will stop making sugar and alcohol at Eppeville and 122 workers would be moved to its nearby factory in Roye, with 10 staying at the plant to operate storage activities, the Saint Louis Sucre spokeswoman said.

The Cagny factory will cease sugar production to concentrate on sugar storage and animal feed production from molasses, which would only need 8 employees out of 85 currently, she said.

Raw sugar futures ended 2018 at their lowest in 10 years, pressured by heavy global oversupply.

The European Union liberalised its sugar market in September 2017, ending a system of guaranteed minimum prices and protected production quotas. This gave producers more freedom to expand and export, but a worst-case scenario emerged, with European producers exposed to collapsing world prices. (Reporting by Sybille de La Hamaide and Valerie Parent, Additional reporting by Michael Hogan, editing by Gus Trompiz and David Evans)

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