Bittersweet results

The increase in sales of sugar and sugar-related products, as well as those of grain crops, brought in revenues of R67.725 (zł.363.6) million for Ukranian sugar producer Astarta in 2006 - 30.8 percent higher than the year before. Sugar production rose by 83.5 percent from 87,500 to 160,600 tons while the company's farmland for sugar beet production grew from 7,400 ha to 15,600 ha. Sugar-beet output increased more than two-fold, from 217,000 tonnes to 527,000 tonnes.

In spite of all this development, operational costs grew faster than revenues due to rising prices for fuels and fertilizers. In addition, the company's profit for 2006 fell to R5.6 (zł.21.8) million - nearly half of 2005's profits - as a result of growing general administrative expenses, such as a rise in the cost of salaries and audit services.

"This year, we would like to repeat the results we had in 2005," said Viktor Ivanchyk, CEO of Astarta. By the end of this year, the company plans to increase the arable land areas under lease from about 90,000 to over 100,000 ha, along with expanding sugar production from 160,600 to 170,000 tonnes. In addition, the company predicts an increase in its share of the beet-production market from 42 percent in 2006 to 60 percent in 2007. "We want as many sugar beets as possible to come from our own production, because the cost of beets impacts the cost of sugar production," said Ivanchyk.

Astarta will continue to diversify its sales to target beverage and dairy producers, and pharmaceutical companies. This year's contract with Coca-Cola Beverages Ukraine Limited is a signal that the company is strengthening its position in the beverage segment. With respect to grain and milk production, those sectors are expected to grow by over 40 percent and 20 percent, respectively.