Imperial Sugar, Sugar Growers and Refiners and Cargill have formed a three-way joint venture to build and operate a new cane sugar refinery in Gramercy, Louisiana.
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The venture, Louisiana Sugar Refining (LSR), closed financing agreements aggregating US$145m to provide construction and working capital financing for the project.
Each member of LSR agreed to contribute $30m in cash or assets as equity to capitalise the venture.
The venture, which is one-third owned by each company, will be located next to an existing Imperial Sugar refinery. That facility will continue to operate during the construction and start-up phase of the new refinery, which is expected to last 18 to 24 months.
“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,” president and CEO John Sheptor said.
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By GlobalData“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.”
After 2011, Imperial will continue to operate the small bag packing facility in Gramercy, with refined bulk sugar purchased from LSR under a long term, market-based supply agreement.
LSR’s raw cane sugar will be supplied by Sugar Growers through an evergreen raw sugar supply agreement.
Cargill will serve as marketer of the refined sugar produced by LSR, other than refined sugar sold to Imperial.
“Many of our associates at the Gramercy plant will benefit from the construction of the new refinery on the existing site with the creation of sustainable jobs for the foreseeable future,” said Sheptor.
“This joint venture secures a source of raw sugar and assures the viability of refining operations in Gramercy for generations to come.”
