FACT SHEET 5

From canefield to crystal

THE BUSINESS OF SUGAR and beyond...

NEW ZEALAND SUGAR COMPANY LIMITED

The company behind the Chelsea sugar products you see in the supermarket is the New Zealand Sugar Company Limited. It is based
in Birkenhead, on Auckland’s North Shore. New Zealand Sugar was founded in 1884 and the Chelsea Refinery is New Zealand’s only
sugar refinery.

The Chelsea Refinery processes raw sugar for both the domestic and international markets. Most of the raw sugar refined at Chelsea
comes from Queensland. Chelsea produces about 160,000 tonnes of sugar products a year for domestic use in New Zealand. An
additional 40,000 tonnes is exported as sugar or sugar blends.

THE NEW ZEALAND SUGAR MARKET

Sugar can be a very volatile commodity product. Explaining this very simply, it means that sugar is subject to all sorts of factors
which can effect its availability and pricing and therefore ability to be bought or sold around the world. You might be surprised to
know that what happens to sugar crops in Brazil due to a flood for example, will effect world sugar prices, including the price we pay
in New Zealand.

The New Zealand sugar industry was deregulated in 1986 and is one of only four countries in the world whose sugar industry is wholly
deregulated. What this means, is there are no tariffs, quotas or controls on the import or export of sugar, ie no industry protection.
To be competitive (at home and overseas) Chelsea is committed to:
■ competing actively for business
■ delivering excellent service to its customers
■ keeping costs under control
■ providing quality, service and efficiency in all its operations
■ developing new products and markets

Chelsea is New Zealand’s leading brand of sugar, which means most people prefer to use Chelsea at home or if their business requires
sugar as an ingredient. Chelsea’s main competitors are imported sugar and housebrands (those products marketed by supermarkets
themselves).

New Zealand Sugar Company Limited operates in four key business areas:
■ retail (supermarket)
■ food and beverage (manufacturer)
■ export
■ sugar blends.

CHELSEA SUGAR AND THE EXPORT MARKET

■ Chelsea Sugar is committed to expanding its business in sugar exports, in exported foods containing sugar and sugar blends.
■ Chelsea Sugar is exported mainly to the Pacific Islands with key markets including Tahiti, New Caledonia, the Solomons, Fiji,
Samoa and Australia.
■ Some specialty products such as coffee sugar, golden syrup and sugar blends are exported to parts of Asia.
■ Chelsea Sugar is customer focused and adapts to suit the customer’s requirements. For example in some Pacific Islands, sugar
needs to be shipped in open air boats to outer islands so Chelsea ensure the sugar is packed in protective plastic so the product
arrives safe and sound.
■ Sugar blends (sugar and other ingredients) is a developing export business with the main focus on Japan’s beverage and
baking sectors.

THE WORLD SUGAR MARKET

■ Sugar is a volatile commodity with its price affected by changes in supply and demand.
■ Sugar is produced from cane or beet in more than 115 countries.
■ World wide sugar production and consumption exceeds 120 million tonnes.
■ The majority of world sugar production is consumed in the country of production.
■ The world’s largest producers include Brazil, India, European Community, Thailand, China, USA, Australia, Mexico and parts of the
former USSR.
■ Sugar futures markets exist in a number of countries with the three main ones being the New York Coffee, Sugar and Cocoa
Exchange, the London Sugar Futures Market and the Paris Futures Market. ‘Futures’ markets operate around the concept of buying
or selling something (in this case sugar) at a price now for goods which will be delivered in the future.

www.chelsea.co.nz