March 26, 2021

By Lynda Kiernan, Global AgInvesting Media

Louis Dreyfus Company (LDC) has agreed to sell the business and related assets of Imperial Sugar Company to Clewiston, Florida-based U.S. Sugar for an undisclosed amount. 

LDC, which is one of the top five sources, merchandisers, transporters, and marketers of raw and white sugars in the world, acquired Imperial Sugar in 2012 for $78 million. 

Founded in 1843 in Sugar Land, Texas, (which in 1959 based its name on the company) Imperial Sugar is one of the top sugar companies in the U.S. currently operating a cane sugar refinery at Port Wentworth in Savannah, Georgia, and a sugar transfer and liquification facility in Ludlow, Kentucky, sourcing its sugar from Central and South America as well as from the Caribbean. The deal also includes all of Imperial’s consumer-facing sugar brands, which are mainly sold across the southern U.S. 

“Imperial Sugar has a strong company heritage and looks forward to joining the U.S. Sugar family,” said Mike Gorrell, president and CEO, Imperial Sugar. “I am confident that the move will create production, logistics and supply chain synergies and efficiencies that will benefit both companies and our customers, as we continue to bring them the quality products and brands they know and expect.”

For U.S. Sugar, the addition of Imperial Sugar’s refinery business, assets, and brands will supplement its existing 200,000 acres of farmed sugar cane and its large-scale mill and refinery located in Florida.

United Sugars Corp, which is the company’s marketing partner, is responsible for marketing U.S. Sugar’s products through both industrial and retail channels. Once the transaction for Imperial Sugar is closed, United Sugars Corp will assume marketing for Imperial Sugar as well.

“We are confident that this transaction will enable Imperial Sugar to further expand its activities as part of U.S. Sugar, and we wish the business continued success in the future,” said Enrico Biancheri, global head of LDC’s sugar platform.

Louis Dreyfus has stated that the decision to divest Imperial Sugar will not affect its remaining business, and that it will continue to operate across its seven business lines including not only sugar, but as a top exporter of U.S. cotton, soybeans, wheat, and corn. 

“For LDC, this strategic decision does not impact our broader sugar merchandizing business, to which we remain fully committed, and enables us to refocus resources on growing this core business, building on our strong global position.”

“We will continue our work to connect North America’s farmers to international markets, and to bring products to the region from around the world, as we have done for over 100 years,” added Adrian Isman, LDC’s head of North America. “With more than 1,000 employees working at over 50 offices, ports, warehouses and processing facilities across the US and Canada, we remain firmly committed to leveraging our network and expertise to grow our business in the region.”

Give me a Raizen

The sale of Imperial Sugar has not been the only sugar business to be recently sold by LDC. In February of this year, Raizen, the Brazil and Argentina-based joint venture between Royal Dutch Shell and Cosan, agreed to acquire Biosev SA, LDC’s South American sugar and ethanol unit, in a deal worth more than $670.3 million. 

For Raizen, the world’s largest sugar maker, the deal boosts its global standing in the sugar industry, as well as in the South American energy sector, bringing together two companies that produced almost 5 million tons of sugar and 3.84 billion liters of ethanol combined in 2019/2020, and resulting in Raizen controlling 35 sugar million in Brazil with a crush capacity of 105 million tons per year.

For LDC, the group pursued both deals just as global sugar prices reached four-year highs not seen since May 2017. And while the outlook for sugar for 2021 remains bullish, the emergence of new COVID-19 variants has somewhat dampened global demand from the food, ethanol, and biofuel industries. 

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.