New Sugar Refinery Deal Announced

Imperial Sugar Company, Sugar Refiners and Growers, Inc., and Cargill, Incorporated have put together what sounds like a pretty sweet deal.

In the announcement of the new sugar refinery, Imperial's CEO, John Sheptor said,

"This transaction enables Imperial to retire its existing refinery with dated technology for a share of the new state-of-the art refinery without a significant capital outlay by Imperial.

"Following the completion of the construction of the LSR refinery and the rebuild of the Port Wentworth facility, Imperial will own or participate in two of the most modern sugar refineries in the country."

For a variety of reasons, no doubt including the high cost of building a modern sugar refinery, these three sugar industry heavyweights decided to join forces, each putting up cash or other assets valued at $145 million.

The new venture dubbed, "Louisiana Sugar Refining, LLC (LSR)," is a big deal for all three firms in their respective long-term strategies.

Given the current sugar supply and demand debates and what has happened this year with sugar prices, the production capacity the new facility will have should help stabilize the long-term sugar prices--even when Imperial's old sugar plant is retired.

As to when the new plant will come online and the old one retired, the piece says, The existing Gramercy refinery will operate during the construction and start-up phase of the new refinery, expected to be 18 to 24 months.

We're really happy for all three companies involved in this deal, wish them the best, and hope it really does turn out to be a sweet deal for everyone involved.