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Nov 30, 2007 19:25 EEST
November 30 (SeeNews) - Suedzucker Moldova, a unit of Europe's largest sugar producer, German Suedzucker AG, has invested 100 million lei ($9.0 million/6.0 million euro) in 2007 to cut costs and increase competitiveness, a company official said on Friday.
"We invest around 100 million lei every year, mainly in new equipment, repairs, in introducing new technologies," Suedzucker Moldova management board speaker Alexander Koss told SeeNews in a recent interview.
Suedzucker has invested a total of 22.3 million euro in the Moldovan unit so far. It plans to spend 2.0 million euro in the next year to implement energy-saving technologies and to develop farm machinery stations, Koss added.
Koss said that the investments that the company has made should lower costs and raise its competitiveness on the foreign and domestic markets.
"Prices on the Moldovan market still don't match the European ones. We buy energy resources, seeds and other raw materials at European prices, so we have to be competitive," Koss said.
"Our main shareholder has not received any dividends from the Moldovan unit so far," Koss said. "The period of long-term investments has not finished yet."
The net profit of Suedzucker Moldova rose 1.5 times last year 95.1 million lei. The sales of the company grew to 641.1 million lei in 2006 form 536.5 million lei.
Suedzucker Moldova aims to keep its market share at 55% to 65% in Moldova, Koss added.
"We don't want to monopolise the Moldovan market. We have a very strong Russian competitor in the country and that is stimulating us," Koss said.
Sudzucker's rival is Russian-Moldovan company Marr Sugar Moldova, which has three sugar plants in the central Moldova. The company entered the country in 2003.
Suedzucker AG stepped into the Moldovan market in 1998 and set up Suedzucker Moldova in 2001.
The Moldovan unit has four sugar plants in the northern part of the country, two of which are in operation.
"We halted production at the plant in Donduseni in 2002 due to lack of markets for our sugar, while the second one was stopped this year because of shortage of sugar beet caused by the drought," Koss said.
The average processing capacity of each plant is 3,000 tonnes of sugar beet daily. Suedzucker Moldova has 14,000 hectares of its own sugar beet plantations.
Some 84% of Moldova's agricultural land has been hit by this year's drought. The damages reached one billion euro.
"I don't think that the drought will bring changes in the company's plans this year, we will just undertake more measures to prepare the soil and to keep its humidity," Koss said.
(1 euro=16.5802 Moldovan lei)
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