Imperial Sugar Co. announced it is involved in preliminary discussions with Louisiana Sugar Refinery (LSR) to aid in construction and operation of a new state-of-the-art refinery by LSR. LSR, a 50-50 joint venture between Minneapolis-based Cargill and Breaux Bridge, La.-based Sugar Growers & Refiners, Inc. (SUGAR), would involve Imperial in the venture (Imperial would contribute its Gramercy, La. refinery in exchange for a one-third interest in the venture). If the discussions result in a transaction, the new refinery may be located adjacent to Imperial’s Gramercy facility. The co-located refineries would also lessen construction and operation costs for the new refinery.

“A potential strategic alliance with LSR would provide economies of scale while providing a larger integrated network to the marketplace,” says John Sheptor, president and ceo of Imperial Sugar. “It would also allow us to secure sufficient raw sugar supply from LSCPI for Gramercy while the refinery is being built and also benefit the expanded joint venture in the longer term. With a newly strengthened platform in our core business, we would then be able to refocus our efforts to further leverage new business and product development in the retail, organic and Mexican markets.”

Before completing a transaction, the boards of directors of each party must approve the agreements.