Imperial Sugar Closes JV To Build New Cane Sugar Refinery

Existing Gramercy refinery to operate during the construction and start-up phase of the new refinery

Imperial Sugar (Imperial), a processor and marketer of refined sugar, has formed and funded a three-way joint venture with Sugar Growers and Refiners (Sugar) and Cargill, to construct and operate a cane sugar refinery in Gramercy, Louisiana adjacent to Imperial’s existing sugar refinery.

The venture, Louisiana Sugar Refining (LSR), which is owned one-third by each member, closed financing agreements aggregating $145m to provide construction and working capital financing for the project. The existing Gramercy refinery will operate during the construction and start-up phase of the new refinery, expected to be 18 to 24 months.

The existing refinery will be operated by Imperial for its own account until December 31, 2010, during which time it is obligated to complete certain improvements currently estimated to cost approximately $6m.

The equipment and personal property in the existing refinery will be contributed to LSR on January 1, 2011. After January 1, 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 through raw sugar supply agreement. Cargill will serve as marketer of the refined sugar produced by LSR, other than refined sugar sold to Imperial.

John Sheptor, president and CEO of Imperial Sugar, 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.”