Nordzucker suspends development of its pea protein manufacturing facility. - Nordzucker halts construction of its pea protein production facility.
Nordzucker Abandons Plans for Pea Protein Factory Construction
The Nordzucker corporation has decided to abandon plans for building a pea protein factory in Groß Munzel, near Hannover, originally announced in December 2021. Charles Lars Gorissen, the corporation's CEO, revealed this during the company's earnings presentation in Braunschweig, citing a slower-than-expected market development for such proteins as the primary reason for the decision.
In an earlier announcement, Nordzucker intended to construct a new plant in Groß Munzel to produce plant-based proteins from peas. The project, which had its groundbreaking ceremony in the Barsinghausen district in November 2021, was set to require an investment of over 100 million euros, with production scheduled to commence in 2026 and the creation of 60 new jobs.
However, just a month after the groundbreaking ceremony, production director Alexander Godow reported the project's halt. The reasoning behind this decision was the significant slowdown in the growth of the market for alternative proteins, a development that rendered the projected prices Nordzucker had anticipated unattainable, making the factory's profitability uncertain.
The cancellation of the project will incur a cost of 13 million euros for Nordzucker. This includes five million euros spent on planning and engineering, and another eight million euros for dissolving pea supply contracts that had already been signed.
Initially, Nordzucker aimed to reduce its dependence on the European sugar market through the new plant, but the company has not abandoned the idea of alternative proteins entirely. Gorissen expressed that they still see great potential for alternative proteins, despite canceling the construction of their own plant. Instead, Nordzucker is now exploring other avenues to enter the market, such as collaborations or acquisitions, and they are not limited to peas for their new ventures. Gorissen said they are starting anew in their pursuit of alternative proteins.
The cancellation of Nordzucker's pea protein factory construction project in Groß Munzel has resulted in a cost of 13 million euros, primarily due to planning and engineering costs and the dissolution of pea supply contracts. Despite this setback, the corporation's CEO, Charles Lars Gorissen, still sees potential in the alternative protein market and is considering partnerships or acquisitions as alternatives to build their presence. The company's shift in strategy for alternative proteins doesn't exclude the possibility of venturing into food-and-drink sectors, which aligns with the changing lifestyle and finance trends. This decision demonstrates Nordzucker's adaptability in the business world, demonstrating their commitment to remaining competitive with evolving market needs.
