Südzucker International Finance B. V. Südzucker AG ... - Xetra

eet and grain, from which energy-saving bio-ethanol can be produced at a plant locatednext to a sugar factory. We already have the technology for this process and it is beingused successfully by our French company, Saint Louis Sucre. We understand theproduction side of the project, but there are sales-side risks due to limited tax-freeexemption for bio-ethanol expiring in 2008, competition from imports from othercountries and the development of demand.A major aspect in our considerations is the interest of our shareholders. We see quality,safety, health and the environment as fundamental building blocks for continuing growthand increasing the value of Südzucker Group. As part of our relentless pursuit ofsustained growth for the group, we have set up a group-wide system enabling us to takean integrated view, from agricultural production through to the end-product. As well as along-term group strategy, high standards of corporate governance are a major conditionfor maintaining the trust of our shareholders. Hence, in January 2003 Südzucker adaptedthe standing procedural rules for the supervisory board and executive board and thusmatch the recommendations of the German corporate governance code established bygovernment commission.In December 2002 Deutsche Bank placed 6.1 % of its Südzucker shares with existingshareholders. Our Austrian shareholders acquired 4.5 % via ZSG NL (Netherlands) B.V.and thus hold 10 % of Südzucker, and Süddeutsche Zuckerrübenverwertungs-Genossenschaft eG (SZVG) increased its shareholding by 1.6 % to 56 %.We have achieved an excellent position in key markets and major new product areasand look to the future with self-assurance and confidence, particularly in these turbulenttimes for the sugar and food industry. We have described the discussion on the futureformat of the sugar market regulation, which has been prolonged through mid-2006, asfrom page 33 of this report. We take up the challenges facing us, make those changesneeded and use all opportunities available to us, relying on our talented andentrepreneurial staff and the trust of our shareholders.Sincerely,SÜDZUCKER AG Mannheim/OchsenfurtThe executive boardF-49