Sugar beet group may buy plants

Deal would let growers run 4 area factories

By Emily Mullen, Staff Writer
Times Herald

SANDUSKY – Thumb-area sugar beet farmers could soon control more of their own agricultural destiny.

Pending federal approval, the 1,400-member Michigan Sugar Beer Growers Association will pay the bankrupt Texas-based Imperial Sugar Co. $65 million for four sugar beet processing plants, including one in Sanilac County.

The Michigan Sugar Co., a subsidiary of Imperial Sugar, owns the plants. The Saginaw-based growers association, a cooperative representing sugar beet farmers in Michigan, Ontario and northern Ohio, could gain total control of plants in Croswell, Caro, Carollton and Sebewaing.

Officials from the growers association and Imperial Sugar met earlier this week to discuss the sale, which is targeted for Sept. 1. The farmers and Imperial agreed to the deal, which is subject to approval from a federal bankruptcy court.

"The meeting was successful," said Marty Lewis of North Street, a farmer who plants 280 acres of sugar beets in Clyde, Grant and Fort Gratiot townships. "A lot of people turned out and I think were pleased with the terms of the purchase agreement."

The Times Herald obtained a copy of the cooperative’s letter of intent to buy the plants.

The letter indicates a $55 million price to be paid to Imperial by Sept. 1 – after the 2001 crops are harvested – with deferred payments of $10 million.

Imperial, headquartered in Sugar Land, Texas, filed for Chapter 11 bankruptcy protection in January in order to restructure its finances.

Richard Leach, executive vice president of the growers association, said the co-op was formed last summer after Imperial offered to sell the plants.

"The purchase would allow the growers to manage the four Michigan plants while allowing Imperial to market the refined sugar," Mr. Leach said. He said the co-op will contract Imperial as its marketer for 10 years and pay the company a commission for sales. The growers will have full ownership of the sugar and any of its byproducts, such as pulp and molasses.

"We’re going to be teaming up with the best marketers, which is really going to be to our advantage," Mr. Leach said.

Imperial, which controls about 33% of the U.S. sugar market, is retaining control of sugar plants in Ohio as collateral for the deferred payments. It’s not clear if the growers association will get control of the Ohio plants after the deferred payments are made.

The letter of intent also indicates that in order for the growers to be paid for their 2000 crops – at $2.50 per refined ton – farmers must produce the same yield during the 2001 year, or about 125,000 acres. The four plants annually process 127,000 acres of Michigan sugar beets and employ about 350 people.

The sugar beets are refined at the plants into pure white sugar in one step, Mr. Leach said, whereas sugar cane is processed in two refinement phases in order to remove the molasses.

Sugar beets are rooted crops that store 8 to 10 pounds of sugar in their roots. Cane sugar stores all the sugar in its stalks, which grow above the ground.

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