The only Romanian-held plant of the remaining three is Bod, while Agrana is Austrian-owned and Tereos is French-held.
“The closure of the plant in Oradea is an attempt at Romanians’ spoonful of sugar. There are three plants in business in Romania in Roman, Bod and Ludus and the rest are in shambles. Investors firmly look out for their best interests not ours. The free market is the argument they use to end the discussion, but things are subtler than that,” said Doru Mot, owner of Agro Mot farm in Sannicolau Mare, Timis County, who grew beet on 105 hectares for Zaharul Oradea in 2017.
Although the Trade Registry had 14 sugar plants in its records in 2016, most of them are insolvent, bankrupt, halted operations or are about to close.
The year 2004 was the best for Romania’s sugar industry ever, according to official statistics, when 33 sugar plants generated 6.8 billion lei revenue, 3.8 times higher than in 2016.
The closure of the Zahar Oradea plant leaves sugar beet farmers in Bihor, Satu Mare, Arad and Timis Counties without a market, after having invested in specific machinery to be able to grow sugar beet, which they cannot use for other crops.
“Farmers will lose a steady stream of income. These farmers made investments specific to the sugar beet crops, harvesting technology, equipment impossible to use for other crops. There are about ten such pieces of equipment in the west of the country that cost EUR400,000 each,” Ioan Puiu, chairman of the Roman Sugar Beet Farmers Association, told ZF.
Others that stand to lose are the farm input vendors, who used to sell inputs of about EUR1,500 per hectare to sugar beet farmers in western Romania.
“The investment per hectare of sugar beet crop is EUR1,500 – EUR1,600. One hectare yields 52 tons on average, which sells for EUR27 or EUR28/ton. Sales reach EUR1,400 per hectare, and there’s the about EUR900 subsidy. Farmers’ profit is EUR700 – EUR800. It’s a rather complicated crop, but more profitable than wheat, corn or sunflower,” Puiu said.
Pfeifer & Langen is closing the sugar plant in Oradea for competitiveness reasons due to the lifting of the sugar quotas, which pushed the sugar price down.
Once the stocks of Diamant sugar made in Oradea run out, the company will sell sugar made in Poland and Germany and has already established a company in Santion, Bihor County, Pfeifer & Langen Romania, to store, package and sell the Diamant sugar made abroad.
“They want to sell the plant piece by piece, beat competition. They will keep the nice contracts they have in Romania with big customers like Coca-Cola. The Diamant brand will remain on the market, they’ve got market share, everybody knows them. Does it matter one imports the sugar?” said Dragos Frumosu, leader of the food industry trade union federation, which represents the 220 employees that stand to lose their jobs.
Sugar manufacturing is an industry that numbered 14 companies with 1.59 billion lei (EUR341 million) revenue and RON1.28 billion debt in 2016, according to Trade Registry data. (EUR1=RON4.6514)