Cosun Beet Company

Cosun Beet Company (before 2020 Suiker Unie)[1] is a part of Royal Cosun. It produces white sugar and other refined sugar products. By acquiring the beet sugar division of Corbion in 2007 and Danisco Sugar GmbH in 2008, Cosun Beet Company became one of the five biggest European producers of sugar from sugar beet.

Cosun Beet Company
IndustrySugar production
Founded1928
Headquarters
Breda
,
Netherlands
ProductsWhite sugar

Background

The rise of the cooperatives

Cosun Beet Company originates from a cooperative created by sugar beet farmers. In the Netherlands, the first beet sugar factory was opened in Zevenbergen in 1858. In general, a sugar factory would deliver the seed for the beets to the farmer and pay a fixed price per kilogram of beets delivered to the factory.[2] As plant breeding resulted in steadily smaller beet with a higher sugar content, this went against the interests of the farmers.[3]

Agriculture traditionally has many cooperatives. For sugar beet farmers, cooperatives were important to buy artificial fertilizers, but above all to create a more level playing field in their dealings with beet sugar factories. These had organized themselves to eliminate competition.[2] In 1874 they e.g. determined and advertised that they would not pay more than 10 guilders for a tonne of sugar beet.[4] In 1885 the factory cartel eliminated all competition by making arrangement to give each factory a fixed part of the sugar beet harvest.[3]

It nevertheless took quite some time to found the first cooperative beet sugar factory. The Eerste Nederlandsche Coöperatieve Beetwortelsuikerfabriek in Sas van Gent opened in 1900. By 1916, there were seven cooperative beet sugar factories:

Later on, other cooperative sugar factories would be opened.

Concentration

The success of the cooperative sugar factories was one of the reasons that the public and private companies in the sugar industry started to concentrate.[2] The increasing cost of investments was another reason. In 1919 most of the non-cooperative sugar industry merged to found Centrale Suiker Maatschappij (CSM).

The cooperative sugar factories understood that they also had to increase their scale of operations. In July 1928 the Coöperatieve Suikerfabriek Zevenbergen and the Dinteloord Sugar Factory entered into a partnership.[5] In 1930 the Zeeland Sugar Factory in Bergen op Zoom was bought by competitor CSM and closed down. In 1947 the partnership in Dinteloord and the Roosendaal cooperative decided to merge and form the Verenigde Coöperatieve Suikerfabrieken (VCS) with head office in Dinteloord. The merger would allow the factory in Roosendaal to be closed down. This eliminated some overcapacity and the need for investments amounting to 2,000,000 guilders.[6]

History

Foundation of Suiker Unie
Suiker Unie logo

In 1966 the super cooperative Suiker Unie was formed. This was a cooperative of the cooperatives: VCS, Puttershoek sugar factory, Friesch-Groningsche Coöperatieve Beetwortelsuikerfabriek and ENCBS. Suiker Unie aimed to coordinate production. The foundation of Suiker Unie was also induced by the foundation of the Common Market Organization for Sugar (a.k.a. EU sugar quota system), which would start in 1968. At the time these four cooperatives had 6 sugar factories and processed 63 % of Dutch sugar beets.[7]

Sugar production is very sensible to economies of scale. Transport cost and transport time tended to eliminate these economies. Even in the Netherlands, with its fine-grained water transport network, this put a practical limit on the size of sugar factories.[8] As road networks improved, it was no longer necessary to be close to the sugar beet farms, and it became more rational to work with a few larger factories. In 1987 Suiker Unie closed down its factory in Zevenbergen. At the time this even processed beet from the new polders in the IJsselmeer.[9] In 1989, the ENCBS in Sas van Gent was closed.[10] In 1997, the sugar factory in Roosendaal was closed.[8] In 2004 the sugar factory in Puttershoek was closed down. Storage and distribution activities of Suiker Unie continued in Puttershoek.[11] After that, the remaining factories were:

  • Sugar factory Dinteloord
  • Friesch-Groningsche Coöperatieve Beetwortelsuikerfabriek in Groningen

Acquisition of the Centrale Suiker Maatschappij (CSM)
Sugar factory in Hoogkerk-Vierverlaten, Groningen (2012)

In 2006 competitor CSM announced that it would sell its sugar division to Cosun, the company that owned Suiker Unie. At that time, this had 11,500 farmers growing sugar beet, and a market share of 5% in Europe. CSM brought with it its last remaining sugar factory in Vierverlaten, Hoogkerk, Groningen municipality, and a sugar works in Breda. The price for CSM's sugar activities was about 200 million euro. The move was triggered by the liberalization of the European sugar market, and the lowering of the guaranteed sugar price by 36%.[12]

In 2008, the European Union then suddenly decided to limit beet sugar production in favor of more free trade in sugar from cane. It led Corbion to immediately close the Friesch-Groningsche Coöperatieve Beetwortelsuikerfabriek in Groningen city.[13] The two sugar factories that were left by ultimo 2008 were:

  • Sugar factory Dinteloord
  • Sugar factory in Vierverlaten, Hoogkerk (ex-CSM)

In 2009 Cosun bought the sugar factory in Anklam, Germany with a quotum of 112,000 ton from Danisco Sugar. It was Suiker Unie's first foreign sugar factory. Anklam also produces bio ethanol.[14]

In 2021 Cosun Beet Company became the sole owner of trading company Limako.[15] Limako had been founded in 1968 by Suiker Unie (51%) and ED&F MAN (49%). Limako is a trader in beet sugar and raw cane sugar and facilitates refinement and logistics.[16]

Organization in 2023

In 2023, Cosun beet company was organized thus:[17]

  • Head office in Dinteloord
  • Sugar factory Dinteloord
  • Sugar factory Vierverlaten, Groningen
  • Specialty factory Puttershoek
  • Specialty factory Roosendaal
  • Bio based Experts Dinteloord
  • Innovation Center Dinteloord
  • Green Protein Dinteloord
  • Sugar factory Anklam, Germany
  • Sales Office in Ferrara, Italy

Sugar production and refining
Main article: Beet sugar factory

Each year, Cosun Beet Company produces about a million tonnes of sugar. Byproducts are:

  • Beet pulp
  • Beet molasses
  • Lime Cake (écume-chaux)
  • Biogas

Cosun Beet Company has the trade mark Van Gilse for selling to Dutch consumers. Van Gilse products are e.g. sugar cubes (also from cane sugar) and beet sugar syrup. These sugar specialties are made in factories in Puttershoek and Roosendaal, originating from the former sugar factories in those places.

The steady liberalization of the sugar market also had a small advantage for Cosun Beet Company, which could then cheaply raw cane sugar. E.g. when in 2019 the growth of sugar beet had been delayed by bad weather, Cosun increased its processing of cane sugar. This way, the beet had more time to grow before they were harvested and Cosun still meet its obligations to deliver white sugar.[18]

Results

The recent beet campaigns of Suiker Unie had the below results. The strong production growth in 2007 was due to the acquisition of CSM from Corbion. The sugar content of the beet varies because of the weather during growth. The extraction index shows that over 90% of the sugar content is recovered from the beet. The beet price is an average price and refers to so-called quotum beet with an average extraction index and sugar content. For 'surplus beet' prices paid to the farmers were generally lower. In 2010 this was € 30.44 per tonne. In 2007 the beet price seriously declined because of the new regulations which had been effective in 2006.

In 2017 there was a record harvest of sugar beet. This was also due to the end of the European Union Quota regulations in October 2017. In 2017 the yield per hectare was 15.5 tonne, or about € 4000 per ha for the farmer. In 2018 the beet suffered from draught and the harvest was much smaller.[19] To make matters worse, the world sugar price hit a 10-year low in 2018.[19]

Year Beet processed
(×1000 ton)		 Sugar content
of beet		 Extraction
(index)		 Sugar production
(×1000 ton)		 Campaign
(in days)		 Quotum price beet
(in € per tonne)		 Yield per ha
(in €)
2006 3468 16.4% - 537 - 49.05 -
2007 5266 17.4% 91.1 853 - 41.31 -
2008 5200 17.2% 91.2 861 - 39.44 2902
2009 5730 17.7% 91.8 992 141 43.00 3252
2010 5273 16.8% 91.1 873 125 43.00 3082
2011 5845 17.0% 91.7 999 130 55.69 4038
2012 5772 17.1% 91.4 969 120 68.80 4871
2013 5734 16.8% 91.1 948 121 67.26 4917
2014 6866 16.7% 91.2 1125 135 50.18 4354
2015 4878 16.7% 90.9 790 99 43.01 3301
2016 5577 17.1% 90.9 934 109 44.15 3317
2017 8043 16.6% 90.9 1329 150 45.62 4007
2018 6556 17.4% 89.9 1103 120 35.59[20] 2666
2019 6777 16.3% 89.6 1094 - 36.05 2930
2020 6840 16.1% 89.4 1089 - 35.58 2901
2021 6797 16.7% 90.7 1137 - 38.91 3129

References

Citations
  1. Cosun 2 July 2020.
  2. Franken & Zoodsma 1995.
  3. Velthuys-Bechtold 1998.
  4. De Grondwet 13 September 1874.
  5. Provinciale Noordbrabantsche 10 July 1928.
  6. Algemeen Handelsblad 3 September 1947.
  7. De Volkskrant 13 August 1966.
  8. Fabriekofiel Suikerfabrieken 2021.
  9. Trouw 30 September 1987.
  10. Trouw 5 April 1989.
  11. Cosun 9 May 2022.
  12. Trouw 22 July 2006.
  13. Fabriekofiel Groningen 2023.
  14. Concurrentiemonitor Suiker 2011, p. 42.
  15. Lugtenburg 2021.
  16. Limako 2023.
  17. Cosun Branches 2023.
  18. Wiepkema 2019.
  19. Cosun 14 February 2019.
  20. As of this year the price for average beet.

Bibliography
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