Imperial, Louisiana Sugar discuss new refinery
October 15, 2008
by Ron Sterk
SUGAR LAND, TEXAS — Imperial Sugar Co. said it has entered into preliminary discussions with Louisiana Sugar Refinery, L.L.C. (L.S.R.) to participate in the construction and operation of a new cane sugar refinery by L.S.R.
L.S.R., which currently is constructing a sugar refinery in Reserve, La., that is expected to begin production in the first half of 2010, is a joint venture owned 50% each by Cargill Inc. and Sugar Growers & Refiners, Inc., (SUGAR) a Louisiana cooperative of about 700 growers and seven cane mills.
Discussions include Imperial’s participation in the joint venture and the contribution of its Gramercy, La., sugar refinery in exchange for a one-third interest in the venture, Imperial said. The companies also are exploring the possibility of locating the new refinery adjacent to Imperial’s Gramercy facility. Imperial said it would retain the small bag packaging assets at Gramercy to supply its retail and food service business.
"SUGAR’s growing and milling experience along with Imperial’s and Cargill’s refinery and marketing expertise would result in a more efficient supply chain that integrates raw sugar supply, sugar processing and product distribution to new and existing customers," said John Sheptor, president and chief executive officer of Imperial. "It would also allow us to secure sufficient raw sugar supply while the refinery is being built. With the newly strengthened platform in our core business, we would then be able to refocus our efforts to further leverage new business and product development in the retail, organic and Mexican markets."
Imperial said there was no assurance that the discussions would result in a transaction that would require definitive agreements and approval of the boards of directors of each party.
Imperial’s Port Wentworth (Savannah), Ga., refinery would not be part of the L.S.R. venture, the company said. The Georgia facility currently is closed because of a fire and explosion in February. It is expected to reopen and begin bulk sugar shipments in late 2008.