Sudzucker SWOT and PESTLE Analysis

Strength

This section is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

1. Promising health and dietary food market With the dramatic rise in the number of lifestyle diseases like obesity, heart diseases, type II diabetes, the world health food market has also seen substantial growth. There is also a booming population of fitness enthusiasts consuming dietary food products. Südzucker's special products division is fast growing and emerging in light of this trend. One of the key business units of the special products division is the Beneo functional food products. Founded in 2007, Beneo is one of the leading food producers in Europe and is today active in over 80 countries. Beneo is a supplier of functional food ingredients for food and beverages and animal feed. One of the key product offerings is functional fibres - Inulin and Oligofructose which stimulate the growth of good gut bacteria. Another product is function carbohydrates - Isomalt and Palatinose - which have less calorific value and lower glycemic index compared to starch and sucrose. Speciality rice ingredients are a unique offering whose features include long-lasting crispiness, creaminess, low-fat, gluten-free and lactose-free rice ingredients. This division aims to tap into the vast potential of health and dietary food market.

2. Growing usage of bio-ethanol as a renewable source of energy Bioethanol is a renewable fuel produced from sugar fermentation using crops like sugarcane, thus aiding in the synergy of the CropEnergies segment with other Südzucker divisions. Bioethanol is gaining popularity worldwide as a substitute for petroleum fuels owing to its lower price, less pollutant generation and cleaner fuel burning attributes. Paris Climate Summit has a keen focus on agreements encouraging renewable sources of energies in the transportation market. This is in tandem with the goal to curb the global warming temperature increase at 2°C and reduce the usage of fossil fuels. With an annual production capacity of 1.2 million,CropEnergies is well equipped in terms of capacity and operation to meet the rising consumer and government demands. The successful relaunch of the Wilton production plant in 2016 enables CropEnergies to utilise the production capacity flexibly as per demand requirements. In the long run, the consolidation of multiple suppliers in the European bioethanol market can provide bright opportunities for CropEnergies due to its technological leadership, location and size.

3. Expansion in the U.S. frozen foods market The frozen food market in the U.S. has been reporting notable growth figures over the decade. The frozen food sales in 2013 was 50.38 billion U.S. dollars and had increased to around 53 billion U.S. dollars in 2016. In 2016, the average expenditure on frozen foods was approximately 130 U.S. dollars per consumer unit in the U.S.
Freiberger Group is a wholly owned subsidiary of Südzucker AG. Freiberger Group has been the growth driver of the special product division. Its European sales and distribution operations have been extended to cover the North American markets. Recently, Freiberger acquired the American company, Richelieu Foods Inc. which has enabled it to enter into the U.S. market. Richelieu Foods Inc. is the market leader in private label pizza sector in the U.S. Owing to the already established customer base and technical expertise, this acquisition provides a platform to generate high volume sales and further expansion.

Threat

This section is available only in the 'Complete Report' on purchase.

Political

1. EU sugar policies In the last decade, several taxation policies have been implemented over sugar and food products containing sugar by EU member states. The national governments in Europe have led the introduction of sugar taxes with 6 countries since 2015. As of June 2018, sugar or health tax has been introduced in 11 European countries. Apart from Europe, several emerging nations have introduced similar policies around the globe. For example, since 2014, Mexico has had a sugar tax, owing to the very high rate of diabetes in the country. The key area of focus for sugar taxation has been sugar-sweetened beverages (SSB), which are linked to weight gain and other chronic diseases. In April 2018, the UK introduced the Soft Drinks Industry Levy to non-alcoholic beverages with added sugar, ranging from 18 to 24 pence per litre depending on the sugar content. Similar policies have also been introduced in Ireland. With several other nations considering sugar taxation, there has been mounting pressure on the EU commission and member states from the World Health Organization (WHO) to reformulate their products to reduce the added sugar quantity.

2. WTO Negotiations and free trade policy WTO-II negotiations, conducted in Doha round with the aim of enhancing trade in developing countries, have not been concluded since its commencement in 2001. In parallel with the WTO negotiations, the EU CXL import quota was raised by 114000 tonnes to a cumulative of 791000 tonnes to compensate for the inclusion of Croatia in EU as of 2017. Brazil's share will be 78,000 tonnes of sugarcane, with a tariff of 11 €/t of sugar cane for additional volumes for the first six years. The EU has been negotiating with multiple nations and bloc such as MERCOSUR (comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela) for free trade agreements. In case, sugar and sugar based products are not deemed as sensitive commodities, contrary to current practices, it may be imported in the EU at preferential tariff rates.

Economic

This section is available only in the 'Complete Report' on purchase.

Social

This section is available only in the 'Complete Report' on purchase.

Technological

This section is available only in the 'Complete Report' on purchase.

Legal

This section is available only in the 'Complete Report' on purchase.

Environmental

1. Minimizing waste production: With increasing costs of waste disposal and rising volumes of waste, it is paramount that an efficient recycling process is in place to reduce the ecological footprint. Südzucker aims to optimize the usage of all raw material inputs to not just produce high quality products but also to produce byproducts, especially in case of agricultural produce. For instance, sugar beets are primarily used for the production of sugar but are also used to produce carbocalk, molasses and sugar beet pellets. Carbocalk serves as a lime fertilizer for agricultural farms, molasses serves as animal feed, input for yeast, ethanol and citric acid fermentation and sugar beet pellets serve as animal feed and raw material for the production of renewable energy. The entire production process has multiple value-adding steps to ensure that most of the input product is utilized, thereby lowering the volume of waste produced compared to the volume of raw material processed. The residual waste is also recycled to further minimize the environmental impact

The remaining section of "Environmental" is available only in the 'Complete Report' on purchase.