Agm: Greencore will decide by "early March" whether or not it will process any sugar beet this year, the company's chairman said yesterday. Una McCaffrey reports.

Addressing Greencore's annual general meeting (agm) in Dublin, Ned Sullivan, company chairman, said the group was planning a processing campaign in 2006 and 2007 and had incurred costs to reflect this.

He added, however, that a final decision could not be made on the campaign until some regulatory issues were resolved and until the company could be assured that a full sugar beet crop would be available.

"The Greencore Sugar team is in active discussions to resolve these issues and will make a final decision as soon as possible, but in any event by early March," Mr Sullivan said.

Speaking to reporters after the meeting, Greencore's chief executive David Dilger declared himself "hopeful" that the firm would process sugar this year. "I'm an optimistic person by nature," he said, adding that the firm would need "a lot of beet" if it was to have a new campaign.

Greencore argues that it cannot make a proper decision on processing sugar until rules on the payment of a levy are clarified at EU level. This processing levy has been estimated at €25 million, a cost that Greencore would pass on to sugar customers.

"I'm reluctant for Greencore Sugar to place bets on what politicians might do before they even do it," said Mr Dilger.

Mr Sullivan had earlier told shareholders that, if Greencore was forced to pay the levy on its full quota of 1.25 million tonnes of beet but was restricted from processing this much, it would be a "serious issue".

The chairman presided over an occasionally angry meeting, which was peppered with questions from beet farmers and their representatives.

He fielded questions on sugar for an hour, with many shareholders focusing on the restructuring fund of €145 million that the EU will make available through the Minister for Agriculture when Greencore ceases sugar production.

The company has already closed its processing plant in Carlow but has yet to move on its facility in Mallow, Co Cork. Mr Sullivan said if the company had not closed the Carlow plant last year, it would now be facing the imminent closure of the whole sugar business.

"There will be court injunctions slapped on Greencore before you get any of that €145 million," one shareholder said, reflecting the view commonly held among farmers that they should get most of any EU compensation fund.

"Greencore has a very clear legal entitlement to the restructuring fund," said Mr Sullivan. He said the money would not become available until Greencore renounced its sugar quota and put its restructuring plan to the Minister for Agriculture.

"Hopefully we will not be at that point for another 12-15 months," Mr Sullivan added. "Greencore will assert its right very strongly to the Minister for Agriculture at that time," he said.

"You'll get very little of that money because the Government isn't going to hand it over to an English company," another shareholder said, to considerable applause.

Greencore's nationality, or Irishness, came up repeatedly throughout the meeting, with a number of shareholders highlighting the 9,000 employees the firm has in Britain, and the 500 it has in the Republic.

One said an Irish minister for agriculture would never hand over the restructuring fund to "Tony Blair". Mr Dilger rejected this: "We're a fundamentally Irish company and our Irishness isn't determined by where our employees work."

In a statement delivered at the agm, Mr Sullivan told shareholders Greencore's board was "confident" about the company's future prospects.

In particular, he said the firm's convenience foods division, which provides almost two-thirds of group profits, provided "cause for optimism". Margins had held up, he said.

Shares in Greencore added five cent to close at €3.45 last night. Goodbody said the firm's earnings per share would be diluted by about 20 per cent when it exited sugar production.