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French sugar makers to start output early as energy curbs loom
Global Banking & Finance Review®
Company
By Sybille de La Hamaide
PARIS (Reuters) -France’s two largest sugar makers Tereos and Cristal Union will bring forward the start of their 2022 production ahead of possible energy restrictions by the government this winter if Russia cuts off gas supplies, they said on Wednesday.
Sugar production is among the most energy-intensive industries. French factories, which usually run between mid-September to early February, are highly reliant on gas to transform their sugar beets into the sweetener.
Tereos and Cristal Union plan to bring forward the start of production by about a week with first factories due to kick into action at the end of next week.
“We are bringing forward the start of our plants so as not to be active during the months of January and February which are the coolest ones and thus when there are the biggest risks to have (energy) cuts,” Cristal Union chief executive Xavier Astolfi told Reuters.
Only one mid-size Cristal Union factory will remain active in January, Astolfi said.
French Prime Minister Elisabeth Borne urged companies on Monday to draft energy savings plans by next month, warning they would be hit first if ever France had to ration the supply of gas and electricity.
“Today we still don’t know to what extent they will such restrictions but we are a winter industry so we need to anticipate,” a Tereos spokesperson said. The spokesperson added that the end date for factory activity would depend on weather conditions during the campaign.
The decision to bring forward production was taken after consulting their cooperative’s members, the sugar makers said. Those who will accept to harvest their sugar beets early will be granted a compensation.
Harvesting sugar beets early reduces the plants’ yields but Astolfi said he preferred slightly lower yields than having to leave sugar beets in the fields due to factory closures.
(Reporting by Sybille de La HamaideEditing by Bernadette Baum and Emelia Sithole-Matarise)
Sugar production involves the process of converting sugar beets or sugarcane into sugar, which is an energy-intensive process requiring significant amounts of energy, primarily gas.
Early harvesting is the practice of collecting crops before their usual harvest time, which can affect yield but may be necessary to avoid losses due to unfavorable conditions.
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