Tereos, unveiling record core earnings, joined the attack on proposals to shake-up Europe's sugar regime despite being viewed as one of the groups best positioned for the reforms.

The French-based agribusiness giant, whose operations range from Brazilian cassava for starch to Tanzanian sugar for cane, said that it was targeting a sugar beet yield of 110 tonnes per hectare by 2020, in a drive to make it a more competitive source of the sweetener.

 "Tereos is investing to maintain the competitiveness of sugar beet production in Europe to reduce the cost differences between beet and cane," Thierry Lecomte, the co-operative's chairman said.

In France, where Tereos is the top sugar producer, the group reported a beet yield of 96 tonnes per hectare for 2011-12, taking its total harvest to nearly 16.5m tonnes, and sugar output of 2.7m tonnes.

Self-sufficiency question

However, it was "essential" for this programme that the European Commission maintain its highly-regulated sugar regime, Mr Lecomte said.

The commission has proposed liberalising the market after current measures, such as import quotas and price regulations, including a minimum beet price, expire in September 2015.

The comments echo those from Suedzucker, the German sugar producer, two weeks ago, which praised the current regime for guaranteeing a "high degree of supply security for processors and consumers".

The sugar market volatility of the past two years, which forced the commission last year to lower import hurdles to ensure supplies, "have shown how important adequate self-sufficiency is to damping price volatility", Suedzucker said.

Costs of European beet sugar has historically compared unfavourably with those of sugar derived from cane, sparking complaints earlier in the 2000s from cane-producing countries over subsidised EU's sugar exports, and leading to the current complex regime.

'Best positioned'

Nonetheless, both Suedzucker and Tereos are, with the UK's Associated British Foods, among European sugar groups "best positioned" for the proposed deregulation, according to Rabobank.

Besides being relatively efficient beet producers, there groups would benefit from their ties to cane-producing countries.

Tereos is Europe's only supplier with sugar operations in Brazil, while Suedzucker has exclusive supply agreement with Mauritius, and Associated British Foods controls South Africa-based Illovo Sugar.

Record profit

Tereos's Brazil-focused cane operations raised revenues by one-half in the year to the end of September, leading a 25% rise in group revenues to E4.4bn.

Sales at the French-based grain processing division rose 25%, while beet takings rose 10%.

Group underlying earnings before interest, tax, depreciation and amortisation (ebtda) soared 26% to a record E752m.