AGRANA Beteiligungs-AG

Governance Information • Jan 23, 2006

News Details

Ad-hoc | 23 January 2006 13:24

AGRANA Beteiligungs-AG implements necessary restructuring measures

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— New EU Sugar CMO will compel AGRANA to rationalize operations. Today, the Supervisory Board of AGRANA Beteiligungs-AG met to discuss the effects of the reform of the EU sugar CMO agreed in November 2005 and developments in the WTO and their consequences for the enterprise. Despite the big cuts in output of one third that will be necessary across Europe, AGRANA intends to maintain its sugar output at the level of its full EU quota. However, as a result of WTO decisions, it will no longer be able to use surplus production capacities to make sugar for export. Combined with lower sugar prices and sizeable payments to the restructuring fund, this will greatly intensify pressures on the industry to reduce costs. Far-reaching rationalization and concentration are therefore unavoidable. AGRANA will be closing two of its 11 sugar factories so as to step up the use of available capacities at its remaining factories in the countries concerned. This restructuring will affect the Hohenau factory in Austria (136 employees) and the Rimavská Sobota in Slovakia (123 employees). Social plans are under development at both factories, neither of which will be processing beet any more during the 2006|07 campaign. Austria At present, the group’s three factories in Austria have a total daily beet processing capacity of roughly 40,000 tonnes. Since sugar exports are no longer going to be possible, limiting Austria’s future maximum permissible beet harvest to some 2.6 million tones, this would imply a campaign of just 65 days if all three factories were running, making AGRANA uncompetitive. On the other hand, an extended campaign of nearly 100 days of processing will enable AGRANA to produce Austria’s entire sugar quota in just two factories. Slovakia In addition to changing economic conditions, rationalization in Slovakia is also being made necessary by small factory sizes. The beet previously processed by the sugar factory in Rimavská Sobota, Slovakia, which has a daily processing capacity of just 2,500 tonnes, will now be processed at the Sered factory. Minor outlay on enlarging capacities at Sered will make it possible to produce the entirety of AGRANA’s share of the Slovakian EU sugar quota (56,670 tonnes) in a maximum of 110 days. These measures, which will cause one-off restructuring costs of about EUR 25 million during the 2005|06 financial year, will create the basis for sustained and economical sugar production by the AGRANA Group and will ensure that AGRANA remains competitive even under the new market conditions. This Press Release is also available in the Internet at www.agrana.com. AGRANA Beteiligungs-AG Donau-City-Straße 9 (Strabag-Haus) 1220 Wien Austria ISIN: AT0000603709 WKN: 060370 Listed: Amtlicher Handel in Wien End of ad hoc announcement (c)DGAP 23.01.2006