Imperial Sugar Closing Refinery, Selling Subsidiary for $115M

SUGAR LAND, TX-Imperial Sugar, still looking to shave costs, plans to sell a subsidiary and some California land to Hormel Foods Corp. for $115 million while mothballing the bulk of its Sugar Land, TX-based refinery. The 75,000-sf Texas headquarters across the street from the refinery stays put and stays open, GlobeSt.com is told.

The shutdown will slash 326 of 450 jobs by year’s end and close the state’s only operating sugar cane refinery. Imperial Sugar has been piecemeal selling assets as part of an ongoing reorganization after emerging 15 months ago from a Chapter 11 bankruptcy. The Diamond Crystal brand subsidiary comes with 14 acres in Visalia, CA and four packaging plants staffed with 600 employees in Savannah, GA.

Robert A. Peiser, Imperial’s president and CEO, tells GlobeSt.com that refineries in Gramercy, LA and Savannah will take up the slack from the Texas shutdown. In reality, Sugar Land no longer provides raw sugar cane to the plant. The firm has been bringing it in via ship to Galveston and transporting it via rail to Sugar Land. The Louisiana plant is situated close to the crop while Georgia is a waterfront facility that streamlines the field-to-factory process.

Peiser emphasizes the Sugar Land packaging and distribution components will remain operational. But, he explains, the departments need minimal space and manpower.

The Sugar Land holdings along Texas 90 are the remains of 17,800 acres assembled from two plantations after the Civil War. The corporation originally tagged three small parcels and one office building for sale, but now just a 1.34-acre commercial tract remains on the market. Peiser says other holdings conceivably could go up for sale. Meanwhile, there’s been no final decision made about the refinery’s status.

“These have been extremely difficult decisions to make because of the people involved and the strong heritage that Imperial has in Sugar Land,” says Peiser. “Nevertheless, the industry dynamics dictate that we rationalize our capacity and strengthen our balance sheet.”

For the past year, the Colliers International team of CEO Robert Parsley and Bill Byrd, vice president, have been marketing 3,000 acres in 18 tracts in various states. The brokers are in negotiations with would-be buyers for the bulk of the remaining 1,800 acres in Texas, Indiana and California.