NZ Sugar Company boosts profits on higher exports and lower costs from Chelsea factory

New Zealand Sugar Company, which operates the iconic pink Chelsea Sugar refinery on Auckland’s Waitemata Harbour, boosted profit last year as it benefitted from higher exports and lower costs.

The company’s profit rose 15.7 percent to $21.4 million in the year ended Dec. 31, 2012, as revenue fell 5.8 percent and costs dropped 8.8 percent, according to accounts filed with the Companies Office. Its gross profit margin expanded to 18.6 percent from 15.9 percent.

New Zealand Sugar, which processes about 27,000 tonnes of raw sugar every six weeks, improved the efficiency of its business, reducing costs and negotiating better supply agreements, a spokesman. While revenue fell, the volume of sales increased, led by exports.

World prices for raw sugar have halved since 2011 when they reached a high of 35 US cents a pound.

“That’s a big driver of top line revenue and top line cost,” the spokesman said. “Our customers benefitted from that fall in prices because they are buying world market prices. Our ability to generate profit isn’t necessarily determined by changes in the world market price.”

The refinery is New Zealand’s oldest, supplying sugar products since 1884. New Zealand Sugar is 75-percent owned by Singapore-based agricultural company Wilmar International, the world’s largest raw sugar producer and refiner, and 25-percent owned by Mackay Sugar, Australia’s second largest sugar milling company.

Wilmar acquired the Chelsea refinery when it bought CSR’s Sucrogen business in Australia and New Zealand in 2010.