Strategy

In an international environment increasingly marked by high commodity price and currency volatility, the creation and listing of Tereos Internacional, the strategic partnership sealed in Brazil with Petrobras and the main French grain cooperatives all represent assets which are enabling Tereos to prepare for the future.

There is talk of French agribusiness being in decline. What is the actual situation?

Two observations stand out:

• While France and Germany have an equivalent weighting in terms of national quotas (approximately 20% each), French operators, with the exception of Tereos, which is present in the Czech Republic, do not count on the European scene, whereas German operators control 50% of European sugar quotas.

• From a world-leading position for agrifood exports in 2000, France had slipped to fourth place in 2010, behind Germany, the Netherlands and the US.
The 10 largest French cooperatives are only one third the size of Europe's top 10. As a result, it is not enough to be the European number one for wheat or sugar beet yields. Without dynamic capabilities for industrial processing, marketing and export on a good scale, without strong and diversified cooperatives, France is falling behind and over the years is losing its historical position as Europe's leading power in the agroindustry.

What are the industry's dynamics globally?

Globally, Europe is largely unaffected from the major movements which are taking shape in our sugar-alcohol sector.
The financial crisis has forced Brazil's longstanding players to sell off their businesses, with each one more or less the same size as Tereos France: Santa Elisa, Nova America, Moema and Equipav to mention just the main firms. The very significant investments they had embarked on were no longer able to be financed.
Who have they been acquired by? Grain processors and seed crushers to diversify their businesses, traders to access sugar's industrial margin, sugar producers and lastly, Tereos. All these investors are confident in the future of Brazilian sugar.
Another phenomenon concerns the growing internationalization of the industry. Why is this consolidation taking shape? Because, looking beyond the volatility seen, the trend is fundamentally bullish for both sugar and ethanol.

In this context, what does the future hold for French sugar beet?

With the shift in global supplies to cane sugar, this encouraged us to invest in sugar cane in Brazil in 2000. 10 years on, the gap in terms of competitiveness has narrowed.
Brazil's economic development has led to strong growth in wages, which has accelerated the process for mechanizing the cutting and planting stages. Moreover, the interest price for sugar has risen from 6 cents per pound to 18 cents some 10 years later.
At the same time, sugar beet is much richer and has progressed in terms of both cleanliness and yields. On the one hand, continued progress, and on the other, stagnating levels of agricultural productivity.
It is no longer inconceivable that sugar beet will be as competitive as sugar cane by 2020. The outlook for sugar beet is therefore very positive. As a result, we are determined to continue moving forward on sugar beet, as well as starch and sugar cane!