1. European Sugar Refineries Association Member States Reception 25 th July 2012

2. Agenda  Introduction  Issues  Myths  Solutions 2

3. Sugar Refiners in Europe Tate & Lyle Sugars AzucareraTereos Saint Louis Sucre SFIR Finsugar AgranaLemarco SidulDAIRAR Litex Zaharni EAD Zaharen Kombinat Plovdiv  ESRA was formed in February 2011  With 26 refineries, it comprises the large majority of the refining capacity  Represents about 4500 employees with about 2400 customers  ESRA is the common voice for cane refiners with regulatory authorities in Europe 3

4. Why Europe Needs Cane Refiners Europe’s cane refiners…  Bring choice to consumers  Contribute to competition  Aid food security by having a different raw material and processing model  Helps deliver EU Development policy by being a stable and long-term buyer of cane sugar  Provide an important link to the global markets  Local industries provide thousands of high quality manufacturing jobs Two of the 26 cane sugar refineries in Europe 4

5. Current situation - Challenges 5 Refiners face major challenges to manage their business not because they aren't competitive access to raw material but because they don’t have fair access to raw material at competitive prices or cost efficient

6. Fair Access to Raw Material - Our Key Issue  EU Commission forecast preferential imports would double from 2006 levels to 3.5 million tonnes  EU refining capacity has been developed on Commission’s forecasts  Current sugar market based on this balance  There is structural sugar supply deficit in the EU market  This needs to be solved to ensure fair terms of competition  Otherwise it is will lead to the destruction of the majority of cane refineries in the EU 6

7. Lack of raw material - Consequences 7 Refiners not operating at economically viable levels 1 Impact on suppliers and customers 4 Distorts competition 5 Over 4,500 jobs threatened 2 3 White sugar prices raised 50% in 18 months (Dec-May)

8. Unbalanced solutions – Evolution  Despite exceptional measures needed because insufficient raw sugar imports  More out-of-quota sugar released than alternative raw cane imports allowed  In 2011/12 the situation was even more unbalanced : 684 vs 370 thousand tonnes WSE  Imports of whites effectively delocalising EU jobs outside 8 684 370

9. Issues Until 2015  European Commission should allow the 3.5 million tonnes of duty free cane sugar they forecast would arrive  If it cannot come from EPA and EBA countries then it should be allowed from other suppliers  The current mix of solutions is unfair  Average fee of €53 for beets  Auction costing €183 for cane  It will kill cane refineries who face  Cost of running at 60% capacity  Unfair cost of tax and new supply 9

10. Low Imports – Need for measures  1.8mt of EPA/EBA imports forecast in 11/12 may be too optimistic  Only 1.38mt of licenses applications have been made until 13/07/2012  only 3 months left!!  “Exceptional” measures needed AGAIN because of the structural shortage of imports 10

11. Myths – 4 million imported in 2010/11  In 2010-11 out of 4 million tonnes of imports, 2 million tonnes came as white, refined sugar or sugar within processed products  Refiners could only use about 2 million tonnes, much less than forecasted 11

12. Myths – Raws alternative markets  ISO data clearly shows that cane sugar exports from EPA/EBA countries to all markets have actually fallen since 2005.  Due to structural reasons EPA/EBA exports to the EU have simply not risen. 12

13. Issues Post 2015 13

14. What do Refiners Want? 14 Access to raw materials Access to raw materials Fair terms of competition Quotas maintained  Market share of 3.5 mt of raw sugar for refiners Quotas maintained  Market share of 3.5 mt of raw sugar for refiners Quotas abolished  Parallel reduction of duties and limits on raw imports Quotas abolished  Parallel reduction of duties and limits on raw imports No favourable treatment

15. We count on you for… 15  Until 2015 at the Management Committee: Ensure sufficient measures are taken early and in a balanced way  Post 2015 At the Council: Shape a new CMO that ensures a level playing field to all sweetener producers in the EU

16. Thank you for your time and attention! Member States Reception 25 th July 2012