150 years Pfeifer & Langen

GERMANY

The history of Pfeifer & Langen, with its today’s fifteen operating sugar factories in Europe and investments in the food industry, is the story of two successful entrepreneurial families. Emil Pfeifer, pioneer of the Rhenish beet sugar industry and founder of the Ossendorf sugar factory, and his son Valentin joined forces in 1870 with brilliant engineer Eugen Langen, partner in the J.J. Langen & Söhne sugar refinery in Cologne. Eugen Langen combined a high-level of technical talent with daring merchant abilities. Langen’s inventive activity is generally known for his participation in the invention of the Otto (four-stroke) engine and the construction of the Wuppertal suspension railway. His inventive activity for process engineering in the sugar industry (Langen’s machines) is documented by a number of trend-setting patents. In the realization of his plans, the connection to the Pfeifer family was a decisive factor in his success.

In the 1860s both families operated refineries processing raw sugar imported from overseas. When beet sugar production was promoted in the German Zollverein, the predecessor of the German Reich, the supply of raw cane sugar became less economical. With the construction of the Dormagen sugar factory in 1864, beet cultivation and beet processing were introduced in the Rhineland. This was followed by the construction of the sugar factories in Elsen (1867) and Düren (1870). On April 19, 1870, Emil Pfeifer, Eugen Langen, and Valentin Pfeifer set up a general partnership, which had its headquarters in Cologne under the name Pfeifer & Langen. Pfeifer & Langen’s first sugar factory in Elsdorf commenced operations during the 1871 beet campaign. A second factory was built in Euskirchen in 1879 in the Rhineland. Further factories were built in the same region: in Ameln (1873), Wevelinghoven (1874), Jülich (1880). In 1884, two more sugar factories were built: one in Bedburg and one in Brühl.

Six of the ten factory companies at that time were founded on the initiative of Rhenish entrepreneurial families, four were built on agricultural initiative (Ameln, Bedburg, Brühl, and Jülich).

Due to the economic collapse of the company P. Schwengers & Söhne in 1926, Pfeifer & Langen acquired the sugar factories Dormagen, Wevelinghoven, and Ameln in addition to the Uerdingen refinery. During the Great Depression, Pfeifer & Langen had to part with its share in the Deutz machine factory. In 1967, the company acquired the syrup factory Gebrüder Langen in Cologne-Braunsfeld and the sugar refinery and candy factory Gebr. Tintelnot in Vlotho/Weser and transferred both their productions to the Euskirchen plant.

Pfeifer und Langen becomes the only sugar manufacturer in the Rhineland

At the beginning of the EU sugar market regulation in 1968, the majority of the factories in the Rhineland belonged to Pfeifer & Langen. As the cultivation of beet migrated further and further north, Pfeifer & Langen built a new sugar factory in Appeldorn in the Lower Rhine region in 1977, opening up the northern Rhineland for beet cultivation.

Technical development and the increasing economic pressure on the sugar industry made a restructuring necessary at the end of the last century. In early 1987, Pfeifer & Langen took over the Düren sugar factory from Schoeller, Peill & Co. GmbH and closed it after that year’s campaign. In 1989, the rural shareholders of the Brühl sugar factory approved the takeover by Pfeifer & Langen. As a consequence, the factory was immediately closed.

After Pfeifer & Langen closed the Dormagen sugar factory in 1980, beet processing at the Ameln and Wevelinghoven factories was discontinued in 1991 and 1995, respectively. Jülich, the last factory in Rhineland to be owned by farmers, was acquired by Pfeifer & Langen in 2006, shortly before the first EU sugar market reform. Subsequently, sugar production in the Rhineland was concentrated in the Euskirchen and Jülich factories. Beet processing ended at the Elsdorf factory in 2007. It was used since only for the production and packaging of special varieties. Most of these tasks are currently being transferred to Jülich factory.

Already in 1985, Pfeifer & Langen had acquired 95 % of the shares of farmer-owned Lippe-Weser-Zucker AG with its factories in Lage and Emmerthal, expanding the distribution channel to Northern Germany. In the following years, production at Lage factory were expanded while the Emmerthal factory and other locations were closed.

Expansion into East Germany and to Eastern and Southern Europe

In December 1989, shortly after the fall of the Berlin Wall, the management of Pfeifer & Langen became the first West German sugar company to establish contacts with the central management of the East German sugar industry and began planning a new factory in the Halle area even before Germany’s reunification.

After the reunification in October 1990, Pfeifer & Langen acquired four East German sugar companies from Treuhand AG, controlling a total of ten small and outdated factories in Alsleben, Elsnigk, Helmsdorf, Langenbogen, Letschin, Löbejün, Nauen, Prosigk, Thöringswerder and Wulfen, all of which were closed down in the years till 1994.

In 1993, Pfeifer & Langen’s subsidiary Diamant-Zucker KG put the newly-built sugar factory in Könnern into operation. On completion, Könnern was one of the largest sugar factories in Europe and is still the largest sugar factory of Pfeifer & Langen.

In 1995, Pfeifer & Langen became the first German sugar company to enter the Polish sugar market by acquiring a stake in the roda sugar factory in the Poznan area. The following year, Pfeifer & Langen was able to acquire shares in the Kosczian, Gosty, and Miejska Górka factories. 2001 saw the purchase of a further five factories in the Kalisz/Konin area: Goslawice, Gniezno, Witaszyce, Zbiersk, and Zduny, all of which were closed down in the following years. The production is now concentrated in roda, Gosty, and Miejska Górka. In 2009, Pfeifer & Langen became the second-largest sugar producer in the country with the acquisition of the then largest Polish sugar factory in Glinojeck from British Sugar. Pfeifer & Langen held about one third of the former Polish EU sugar quota.

In 2006, at the same time as the EU sugar market reform, Pfeifer & Langen established a joint venture with the Italian sugar cooperative CoProB in Minerbio. The distribution company Italia Zuccheri Commerciale sells the sugar produced by CoProB in the sugar deficit country Italy but also imports sugar from Central Europe. Until the end of the EU sugar market regime, imported raw sugar was refined at CoProB’s sugar factory in Minerbio in years when beet sugar was in short supply.

To improve the distribution of sugar products in the deficit countries of Eastern and Southern Europe, Pfeifer & Langen acquired a stake in 1. Ungarische Zuckermanufaktur GmbH in Kaposvár, Hungary, in 2001. Further engagements in trading companies followed in the Czech Republic (2004), Slovenia (2008) together with the construction of a packaging plant and in Greece (2009) and Bulgaria.

In Romania, Pfeifer & Langen acquired the factory in Oradea in 1998. Almost at the same time, French sugar manufacturer Cristal Union acquired the factory in Carei. Since both factories suffered from a shortage of beet, the companies merged their activities and closed down Carei. In 2009, Pfeifer & Langen took over all shares of the Romanian subsidiary and in 2018, the company closed the Oradea sugar factory. Pfeifer & Langen has since been active on the Romanian market with a trading company.

Expansion into the Ukraine

With a joint venture in the west of the Ukraine, Pfeifer & Langen entered sugar production outside the EU for the first time in 2006. Together with a Ukrainian partner, Pfeifer & Langen acquired the Radechiw sugar factory, the largest factory in the Lviv region. In 2013, Pfeifer& Langen Inwestycje Sp. Z.o.o. acquired a 50% stake in Tschortkiv sugar factory (approx. 60 km east of Lviv) from the Kernel Group, which withdrew from sugar production. With a beet processing capacity of 7000 t/d, the factory is one of the largest in the Ukraine. In 2017, Pfeifer & Langen became the second-largest sugar producer in the country by purchasing, along with its Ukrainian partner, six factories in the west of the Ukraine. Three of the factories were not put back into operation. Today, the factories Radechiw (8200 t/d), Tschortkiw (7200 t/d) and Chorostkiw (6000t/day) are still operating while Kosowa (3,100t/day) and Sbarasch (3400 t/d) did not work during the last campaign although they can still be reactivated at any time. Pfeifer & Langen is the only Western European sugar producer/trader currently operating in Ukraine.

Glucose production

Pfeifer & Langen has been producing glucose syrups in the former sugar factory in Dormagen since the early 1980s. The glucose division was expanded in 1994/95 with the acquisition of the French wheat starch manufacturer Chamtor S.A. in Bazancourt, Champagne. Glucose production at Dormagen was shut down in 1997. Pfeifer & Langen ended glucose production in 2007 by selling all shares of Chamtor to a French grain cooperative.

150 years of family business

To date, the company is still family-owned and the sugar group employs 2440 people in Europe. The total turnover of the sugar group in 2019 was about €800mn. In the brand logo, the two sugar loaves symbolize the silhouette of the Cologne Cathedral thus reaffirming the company’s origin and old tradition. At the same time, they stand for quality, and are regarded as a trademark of Pfeifer & Langen far beyond the Rhineland.

The Pfeifer & Langen sugar group sells a quarter of the sugar produced, approximately 350,000t, to end consumers in Europe via food retailers under the brand name “Diamant” or “Kölner Zucker” (sugar from Cologne). The extensive product range includes various sugar, jelly and candy specialties as well as other products such as cinnamon sugar, coffee sugar, and sugar loaves. In addition, Pfeifer & Langen produces several hundred special sugars varieties for its industrial customers. Its long-standing clientele includes well-known companies from the beverage, dairy, bakery and confectionery industries as well as food retailers all purchasing products of the Diamant or Kölner Zucker brands. The product range also includes sugar beet animal feed and quality products for the non-food processing industry.

Pfeifer & Langen’s mission is to develop sugar specialties of the highest quality. Groundbreaking products bear the company’s signature: As early as 1872, Pfeifer & Langen produced sugar cubes using „Langen’s cube sugar process“, and more than 50 years ago it was the first manufacturer to launch jelly sugar on the market. The company’s own Innovation Center, based in Elsdorf, continues this tradition and focuses primarily on new sugar products for consumers and industrial customers. However, the developers are also researching innovations in the non-food sector based on sugar beet.
To mark the anniversary, Pfeifer & Langen has brought out its refined sugar in a limited 1 kg anniversary edition with a retro look.

Sustainable business in challenging times

One of the strengths of the Pfeifer & Langen in Europe lies in its identity as a family business. This enables flexible, entrepreneurially independent management that is not characterized by quarterly figures, but by long-term, cross-generational planning. Pfeifer & Langen benefits from this strength in the highly dynamic sugar market, which has experienced many ups and downs in recent years. Since the abolition of the EU sugar regime, prices have fallen sharply due to intense international competition and oversupply. In addition, beet supply in Germany in jeopardy for a number of reasons, including below-average beet harvests due to weather conditions and a decline in cultivation areas due to beet growers being disadvantaged by the distorted competitive situation in Europe. Despite all these challenges, Pfeifer & Langen firmly believes in the market and in the domestic beet and has made substantial investments in all processing locations in recent years in order to continue to manage the company successfully in the future.

Diversification into the food industry

In 1968, shortly after the introduction of the EU sugar market regulation with its fixed prices and quotas, Pfeifer & Langen began to set up a potato chip production facility at the Wevelinghoven sugar factory. Pfeifer & Langen marketed these under the name chipsfrisch. In 1972, a joint venture was founded with Pfanni-Werke Otto Eckart AG, Munich in which Pfeifer & Langen contributed with its potato chip production. Since 1977, the new company operated under the name Convent Knabbergebäck GmbH & Co KG. In 1995, Convent merged with the company Wolf Bergstrasse, which in 1967 invented the classic nibble “goldfischli”, which are still successful today. This was followed by the foundation of Intersnack Knabber-Gebäck GmbH und Co KG.

Since then, Intersnack has been Germany’s market leader in the salty snack segment with its Chio, funny-frisch, POM-BÄR and many more well-known brands. The Intersnack Group reported sales of €2.7bn in 2018.

In 1972, Krüger GmbH & Co. KG was founded in Bergisch Gladbach, in which Pfeifer & Langen acquired a 50 % share shortly afterwards. It produces instant drinks, chocolate and sugar products, including nut-nougat creams, dietary products, and baby food. The company achieved sales of approximately €1.56bn in 2018.

The shareholder families of Pfeifer & Langen hold their shareholdings, including the sugar group, today under the umbrella of Pfeifer & Langen Industrie- und Handels-KG (Pfeifer & Langen IHKG). Besides the Intersnack Group and Krüger GmbH & Co. KG (non-consolidated), the holding company also holds shares in Naturkost Übelhör (health food) and the beet juice manufacturer Grafschafter Krautfabrik Josef Schmitz KG. Pfeifer & Langen IHKG intends to strengthen existing and new associated companies through targeted investments and to lead them to strategic growth. In recent years, it has taken a stake in the meat replacement manufacturer Amidori and founded the „Rare Sugars“ manufacturer Savanna, which produces allulose and cellobiose from beet sugar.

In total, the consolidated subsidiaries of Pfeifer & Langen Industrie- und Handels-KG together generated sales of over €3.59bn in 2018, of which the sugar group accounted for about €918mn.

Year: 2020
Volume: 145
No. 7
Page: 413–421

Language: ENG

pdf download: 2020-413-421.pdf

Flender