Sugar disaster imminent
Yesterday the treasury met with representatives of the French Saint Louis Sucre (SLS), perhaps for the last time. Last November SLS formally became the buyer of the Śląska Spółka Cukrowa (ŚSC). The day before yesterday, treasury minister Aldona Kamela Sowińska said in a television interview that she would agree that the refineries in the ŚSC would be handed over to Polski Cukier, a sugar holding founded as a nationalist backlash against foreign investment in this country.
SLS was hoping for a quick decision from the supreme administrative court that would give it the right to buy the refineries before Polski Cukier got them for nothing. The original contract stipulated that the French needed the permission of the interior ministry to buy the refineries and this ministry decided that an individual application had to be made for each one - something clearly impossible as the strength of the otherwise near bankrupt group is based on being a unit.
Foreign firms who have managed to get a stake in certain refineries are now asking what is the opinion of the monopolies and mergers watchdog UOKiK. If Polski Cukier is to control 44 refineries then that is much more than forty percent of the domestic market and permission for that is required. Even if the refineries in the Śląska Spółka Cukrowa are discounted then Polski Cukier would still have 28 refineries and fifty percent of the market.
The bad news is that the ŚSC can no longer be discounted. And Polski Cukier starts life with debts of PLN450m. As the treasury minister said on the television yesterday morning, are the farmers and workers who are theoretically to control this holding going to pay this debt. Or is the money to come from the state and even so is it to be raised by giving nurses and teachers a pay cut or from some other source?
Pfeifer und Langen after obtaining refineries in the Kalisz and Konin area now has a 20 percent stake. British Sugar has around 12 percent, Nordzucker around nine percent and Südzucker six percent.
In Poland sugar is highly regulated. Production is not very profitable and the only thing that has kept these companies here and pouring funds into this country is the prospect of EU membership and agricultural intervention. Polish refineries are only kept afloat because of the low prices paid to farmers, once Poland enters the EU the beets would be more expensive and most refineries would go bankrupt. Not that causing unemployment is likely to worry those far right MPs who brought about this catastrophe in the making.