Tereos to close Romanian sugar factory after takeover talks fail

PARIS/BUCHAREST (Reuters) – French sugar and ethanol group Tereos has decided to close and dismantle its factory in Romania after talks with a local company interested in taking over the plant failed to go through, a spokesperson said.

Tereos, the world’s second largest sugar producer by volume, had said earlier this year it was planning to shut its Ludus factory.

The Romanian agriculture minister at the time later said he was in contact with Tereos to try and save the sugar factory.

“The Romanian Minister of Agriculture had seconded a private company to study the purchase of Tereos Romania. We were open to this possibility,” a Tereos spokesperson told Reuters.

“But the private company told us that it was unable to pursue the acquisition project,” she added. “The question was not the price, mainly the timing. They had missed a (sugar beet) campaign.”

The interested company was Romanian group Scandia Food, which is actively looking at potential acquisitions to consolidate its business. Chief executive officer Andrei Ursulescu said Scandia Food wanted to see the factory in production to conduct an assessment.

“The price Tereos was asking was relatively prohibitive for something we were not given access to conduct a technical evaluation,” Ursulescu told Reuters.

“We have proposed a postponement until a time when we can see it working. They wanted a signed binding offer by Oct. 31 and a signed deal by Nov. 30. We’ve completed 7-8 transactions already, we have never reached a deal in such a short time.”

The plant, which in 2020 had around 180 employees and is one of Romania’s two last-remaining sugar processing plants, has been loss making amid a steady reduction in the amount of land planted with sugar in the country.

It had a capacity of 60,000 tonnes of sugar but had strongly reduced volumes in the past years. Its final closure was planned for the beginning of 2023, the spokesperson said.

Contacted by Reuters Romanian agriculture minister Petre Daea said he was not aware of the state of negotiations.

“From what I know, the company (Tereos) is in negotiations with a company interested in buying … which wants to keep the factory going,” Daea said.

(Reporting by Sybille de La Hamaide in Paris and Luiza Ilie in Bucharest)