Foreigners still in the dark on fate of sugar privatization
In the ongoing struggle over sugar sector privatization, foreign investors were frustrated once again last week when the government failed to inform them who won the tender for Slaska Spolka Cukrowa, one of Poland's four main sugar holdings.
French giant Saint Louis Sucre (SLS) and Germany's Sudzucker are vying to purchase up to 51% of shares in Slaska Spolka Cukrowa, which is headquartered in the Opole voivodship. Following one-on-one negotiation sessions the government held with strategic investors in mid-March, the Treasury Ministry was due to select one strategic investor for exclusive negotiations two weeks ago.
"A decision was supposed to be made by March 24," said one source close to the privatization process who asked to remain anonymous.
Due to be finalized in March, the privatization of the Slaska holding has been bogged down in an ongoing controversy over how the sugar sector should be privatized. Some farmer trade union leaders and many Solidarity Election Action (AWS) deputies are pushing hard to keep the industry in Polish hands through the creation of one large cooperative, Polski Cukier. That proposed entity would group as many as 30 now independent mills.
Faced with debts reaching upward of zl. 2 billion ($488 million), the sugar sector would be best helped through the direct sale of mills to foreign investors, government officials have said. At the same time, foreign investors have been eager to gain a foothold in Poland, the third-largest sugar producer in Europe.
As of press time last week, neither SLS nor Sudzucker had received word from the government about which of them had made the ministry's final cut.
"We are expecting news at any moment now," said Leszek Podstawski, director at Saint Louis Sucre in Poland. "We are waiting patiently because we know a decision will be made in the next couple of days."
But with investors left waiting in the wings over Slaska's fate, many in the industry wondered last week whether the government's privatization plans would move forward at all. "The government was supposed to have decided by now," the source said.
This new wave of uncertainty follows a recent move by Treasury Minister Emil Wasacz to halt the doling out of shares in sugar holdings to workers and beet growers. Under Poland's current sugar law, 15% of the shares of each sugar mill are to be distributed free to their workers and beet growers.
Many sources said that by holding back on shares destined for mill workers, Wasacz has in essence moved toward the Polski Cukier concept. Under the Polski Cukier plan, shares intended for individual workers would be taken over en masse by the cooperative itself.
Sources said some farmer trade union leaders and AWS deputies pressured Wasacz to halt the meting out of workers' shares to prevent undermining the Polski Cukier venture before it got off the ground. The cooperative would be hamstrung if some farmers refused to join.
"If farmers get shares today, they won't want to hand them back to Polski Cukier," the source said. "The (AWS) deputies aren't sure themselves that all farmers want Polish sugar."
Deputies in favor of the sale of sugar mills to foreign investors last week charged Wasacz with cowering before Polski Cukier proponents. "It looks to me like Minister Wasacz is a prisoner to this group of deputies," said Jan Wyrowinski, a Freedom Union (UW) deputy from Torun. "This issue has created a lot of bad blood among growers and (mill workers). Many see this as a first step toward condemning them to Polski Cukier."
Wasacz's decision appears to have rattled his own ministry and has also become a key point of contention between coalition partners AWS and UW.
"This was not a popular decision in the treasury," one source close to the government said.
As far as the coalition is concerned, Wyrowinski said sugar played a prominent role in coalition talks last week. "Sugar is one of the issues that must absolutely be decided in the near future," he said.
Wyrowinski claimed success last week in swaying Prime Minister Jerzy Buzek and AWS Chairman Marian Krzaklewski toward privatization and away from Polski Cukier. "They didn't say directly, but I think they became convinced that the situation is urgent and that they have to do everything possible for privatization decisions to be made," Wyrowinski said. "The upper leadership circles in AWS became convinced that (privatization) is worth it."
