Sugar Business
Overview of the Russian sugar market in 2024
The Union of Sugar Producers of Russia reported that with 6.7 million tonnes produced in 2024, sugar production remained nearly flat with the last year’s level (+0.3% year‑on‑year). Carryover balances as of 31 December 2024 total 4,014 thousand tonnes, up 1% over figures at same date in 2023.
In 2024, the sugar production season started on 1 August and is expected to end in the third decade of March 2024.
At the end of 2024, the five largest companies in Russia accounted for 65.4% of total sugar production. The share of Prodimex that holds the leading position on the market climbed to 21.3% (+0.8 p.p. year‑on‑year) in the reporting period. The second‑largest sugar producer is Rusagro with a 15.4% share of the market (+0.6 p.p. year‑on‑year). With the share of 14.0% (–0.6 p.p.), Dominant retained its third place. The changes in the total sugar production market shares of the companies over the reporting period were due to differences in the volume of the sugar beet harvest in the regions where the companies operate.
Exports
Sugar exports from Russia surged by 51% year‑on‑year to 999 thousand tonnes. Cross‑boarder sales of sugar was boosted by output growth and strong demand in the Central Asian market, particularly in Kazakhstan and Uzbekistan.
Exports to CIS countries totalled 991 thousand tonnes, up 51% (+334 thousand tonnes) year‑on‑year. Exports to non‑CIS countries in 2024 amounted to 7 thousand tonnes, up 22% year‑on‑year. Kazakhstan has historically been the biggest consumer of Russian sugar; during the reporting period, the country imported 480 thousand tonnes (+65% year‑on‑year, or +189 thousand tonnes) of this product. The second largest buyer in 2024 was Uzbekistan, which boosted its supplies from Russia by 138% year‑on‑year (+153 thousand tonnes) to 263 thousand tonnes.
Imports
In 2024, Russia’s sugar imports went up by 43% year‑on‑year and totalled 273 thousand tonnes. Nearly all of the sugar that was imported came from the Republic of Belarus.
The average annual price of sugar according to the Krasnodar price index in 2024 was RUB 53.0/kg, excluding VAT, up 3% year‑on‑year. At the root of the positive price movements were high exports and stable domestic sugar consumption.
Performance of Rusagro’s Sugar Business in 2024
Rusagro’s Sugar Business is represented by nine sugar plants located in Tambov, Belgorod, Kursk, and Orel Regions in close proximity to the areas where the Company’s Agriculture Business cultivates sugar beet. In Tambov Region, the Company operates the Znamensky, Nikiforovsky, and Zherdevsky sugar plants; in Belgorod Region — the Chernyansky, Nika, and Valuisky plants; in Kursk Region — the Krivetsky and Kshensky plants; and in Orel Region — the Otradinsky plant.
At the end of 2024, the maximum sugar beet processing capacity of Rusagro’s plants was 53.4 thousand tonnes of sugar beet per day.
Depending on the amount of sugar content of the sugar beets, the Company can produce roughly 900 thousand tonnes of sugar during the season (August to July), excluding sugar production from molasses.
Pulp and molasses are the main by‑products of Rusagro’s sugar beet processing. The sugar plants process the pulp into granules and sell it on to third‑party companies, while the molasses is used to produce betaine and additional sugar. The Company has two desugarisation facilities – at Znamensky and Chernyansky sugar plants – with a combined processing capacity of 327 thousand tonnes of molasses per season, allowing for extra production of 120 thousand tonnes of sugar and 30 thousand tonnes of betaine per year and thus making Rusagro one of the world leaders in the production of this amino acid.
Other assets
The Company’s assets include JSC Gerkules cereal plant, which is a large grain‑processing facility with its own packaging line. The plant produces buckwheat and crushed buckwheat for B2B channel and packaged buckwheat and rice – for B2C channel.
The Company’s product portfolio includes five sugar brands of different price brackets: Russkii Sakhar, Chaikofsky, Brauni, Mon Café and Khoroshy, as well as the Tyoplye Traditsii brand (producing both cereals and sugar).
The brand’s product line is regularly reviewed to capitalise on new opportunities and satisfy consumer demand in a dynamic market. In 2024, 13 new sales units of biscuits were introduced: five SKUs of sugar biscuits, four SKUs of sandwich biscuits, two SKUs of short‑dough biscuits (orange‑cinnamon, peanut‑cocoa), two SKUs of short‑dough biscuits with filling (strawberry, chocolate‑nut filling).
In 2024, Rusagro invested a record RUB 9.5 billion in the development and maintenance of its Sugar Business, almost five times the previous year’s level. A key project in the Sugar Business was the installation of long‑term beet clamp storage systems, which will extend the sugar beet processing season, boost operational efficiency and bring about other additional benefits for the business.
Major investment projects
To reduce beet storage losses through the use of advanced technologies
To extend the sugar beet processing season by 20 days, which will drive up sugar production and EBITDA of the Sugar Business
January 2024 – July 2025
9 production sites
3.5 RUB bnCosts in 2024 (excl. VAT)
To increase sugar output in plants due to lower sugar losses and less molasses generated
To reduce equipment wear and tear and improve the overall efficiency of the production process
January 2024 – July 2025
8 production sites
0.5 RUB bnCosts in 2024 (excl. VAT)
To improve shop‑floor working conditions by carrying out interior renovations of administrative offices, forefront and roofing repairs, and repairs of in‑plant asphalted roads
January 2024 – August 2024
9 production sites
0.5 RUB bnCosts in 2024 (excl. VAT)
To improve the condition of concrete beet clamp storage fields, water channels, roads and access routes to sugar beet storage stations
To increase efficiency and productivity of sugar beet storage stations during harvesting
January 2024 – July 2025
9 production sites
0.5 RUB bnCosts in 2024 (excl. VAT)
Technology and innovation
Rusagro’s strategic objective for its Sugar Business is to reduce sugar losses at all stages of beet sugar production. To achieve this, we apply best practices and solutions from the Industry 4.0 stack, ranging from physical devices to bioengineering solutions. At the centre are production of products and their storage and logistics. An innovative project in the area of raw material management was completed in the reporting period.
Projects being implemented as part of the strategy
Sugar production monitoring system
To ensure the objectivity of production data and reduce losses during sugar beet processing
2019–2029
Automation of end‑product accounting and implementation of a product delivery route planning system (TMS) based on unique mathematical algorithms
To reduce the cost of delivering products to consumers by creating optimal routes
2023–2025
Implemented projects of Rusagro’s Sugar Business
Goal:
To reduce losses and increase the accuracy of sugar beet carryover stock management
Production
In 2024, the volume of sugar beet processed by Rusagro’s plants increased by 15% year‑on‑year to 6.6 million tonnes, with 4.8 million tonnes supplied from the fields of the Company’s Agriculture Business. The processing volume of own raw materials grew by 19% year‑on‑year.
Sugar production improved by 13% year‑on‑year, reaching 1,049 thousand tonnes of sugar (+121 thousand tonnes). This figure includes 103 thousand tonnes (–13% year‑on‑year) of sugar that was produced from molasses obtained from the 2023/2024 sugar beet processing season, as well as molasses purchased externally. In addition, 247 thousand tonnes of sugar (+10% year‑on‑year) were produced from third‑party sugar beet purchased from farmers.
The higher output of sugar in January–February 2024 is caused by higher beet harvesting in the 2023 season as compared to the previous year. The sugar production in August–December 2024 rose as a result of an earlier start of processing and higher sugar content of the new season’s beet crop. Based on last year’s results, the sugar content of sugar beet was 18.1%, up 0.5 p.p. year‑on‑year.
Sales
Sales
Rusagro’s sugar sales in 2024 grew by 1% year‑on‑year to 1,071 thousand tonnes (+6,000 tonnes). In the context of the temporary prohibition on Russian sugar exports from May to August 2024, sales volume expanded more slowly than production; however, this was counterbalanced by a rise in shipments at the conclusion of the reporting period under the sales plan.
Sales also included 286 thousand tonnes of pulp (+3% year‑on‑year) and 113 thousand tonnes of raffinate (+150% year‑on‑year), an increase in sales resulting from higher production volumes. Yet, sales of betaine and cereals fell to 19 thousand tonnes (–41% year‑on‑year) and to 2,000 tonnes (–60% year‑on‑year) accordingly.
Brands
In 2024, sugar sales under own brands totalled 162 thousand tonnes, up 17% year‑on‑year. The consumer segment (B2C) accounted for 15% of sugar sales and 21% of sugar sales proceeds.
During the reporting period, Russkii Sakhar and Chaikofsky brands continued to occupy first and second places in the Russian white cube sugar market, while Brauni again dominated the brown cube sugar market.
According to the AC Nielsen research for December 2024, the combined market share of Rusagro’s three sugar brands (Russkii Sakhar, Chaikofsky, Mon Café) in the white cube sugar market was 53.5% (–0.8 p.p.). The Brauni brand, Rusagro’s only brand in the brown cubesugar market, had a 32% share.
According to Tiburon, the Russkii Sakhar and Chaikofsky brands again demonstrated a high level of recognition in 2024. The Russkii Sakhar brand recognition rose by 4 p.p. and reached 89%, the Chaikofsky brand stood at 59% (–2.0 p.p.). At year‑end, loyalty to the Russkii Sakhar brand remained flat at 50%, while loyalty to the Chaikofsky brand dropped to 24% (–1.0 p. p.).
Exports
In 2024, the Sugar Business exports grew by 25% year‑on‑year, reaching a 10‑year high of 448 thousand tonnes. Sugar exports jumped by 84% year‑on‑year and reached 232 thousand tonnes, mainly driven by the expansion of the supply channel to Uzbekistan and Kazakhstan. With 199 thousand tonnes, export volumes of pulp remained virtually unchanged. More than half of the betaine produced was sold abroad.
Revenue from the Sugar Business increased by 5% year‑on‑year to RUB 68 billion, driven by higher sugar sales volumes and positive price movements on the Russian market. Adjusted EBITDA dropped by 29% to RUB 14 billion, mainly due to higher beet costs in sugar production in the first half of 2024, as well as higher equipment maintenance and payroll costs. Business EBITDA margin stood at 20% (–10 p.p. year‑on‑year).