Construction of new sugar refinery delayed no longer

Reserve — Since 2005, the Louisiana sugarcane industry has been buzzing about a new sugar refinery to be built under the partnership of the Cargill corporation and a cooperative of 700 Louisiana sugarcane farmers. Last week this idea finally came to fruition.

A ground-breaking ceremony for Louisiana Sugar Refining LLC, (LSR) was held near Cargill’s Terre Haute Marine facility in Reserve (in St. John the Baptist Parish) along the banks of the Mississippi River.

The new venture will allow sugar producers, who are stockholders in the cooperative, to competitively market their sugar directly to food companies.

“Today we take a significant step towards sharing Louisiana’s place in the U.S. sugar industry,” said Lonnie Champagne, general manager of Breaux Bridge’s Louisiana Sugar Cane Products Inc. (LSCPI)

“Many people have asked, ‘What does this project mean for the Louisiana sugarcane industry?’” Champagne recalled. “For some its the hope of retuning more value from their sugar to the producers. For others it’s the hope that a son or a daughter will have the opportunity to stay on the family farm.”

The cooperative of farmers and land owners that was established in 2006, Sugar Growers and Refiners, Inc. (SUGAR) represents one half of the project, while Cargill composes the other.

The cooperative’s structure requires one mill representative and one grower representative from each of the eight mills participating in the joint venture. For the Louisiana Sugar Cane Cooperative (LASUCA) in St. Martinville, Mike Comb, LASUCA general manager and Henderson cane grower Mike Melancon are representing St. Martin Parish on the coppperative’s board.

In meetings held throughout the state during the almost three-year time span, Champagne and other project representatives told producers that the delay was due to some legal and financial discrepancies. One predominant issue was that a substantial amount of start-up funding was needed to begin construction

Though the state bond commission refused to help fund the project in 2005, SUGAR representatives appealed to a new set of elected officials.

On Feb. 28, a contingent of farmers and sugar industry officials faced off against the State Bond Commission to once again try to procure the funding needed to start building the refinery. In this second attempt, the bond commission agreed to provide SUGAR with a $15 million grant.

“The project was dead,” said Mike Strain, Ph.D., secretary of Louisiana Department of Agriculture and Forestry. “Lonnie Champagne and many people worked very hard and went to Baton Rouge. They told the Bond Commissioner to look beyond the political problems of the look past.”

Cargill representatives came from company headquarters in Minnesota to welcome this long-awaited step of the process.

“The cane growers of this region have a 200-year heritage in growing and milling sugarcane,” said Alan Willits, president of Cargill’s North American corn milling operation. “But to fully participate in this industry they needed to take it one step further, into refining finished products and marketing them to food customers.

“We’ve been marketing to food makers for most of our 140 years,” Willits added. “Adding sugar to our portfolio is a natural extension. And there’s no better place to make high quality sugar than right here in Louisiana.”

SUGAR markets about 800,000 tons of raw sugar annually while LSR will have a 1 million ton annual refining capacity.

The refinery will create 120 permanent jobs for the St. John the Baptist Parish and the annual sales are projected to reach $500 million. LSR expects construction to take about 24 months with commercial production beginning by spring 2010.

Cargill currently has eight facilities in Louisiana, including a salt mining operation in Breaux Bridge.