Imperial Sugar still suffering from refinery rebuild costs

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Refinery, Sugar

Imperial Sugar is still feeling the financial impact of the explosion at its Port Wentworth, Georgia refinery nearly two years ago, as it reported a $23.8m loss for fiscal 2009.

In February last year, a build-up of sugar dust caused an explosion that killed 14 and injured more than 40 at the plant. The Port Wentworth facility is responsible for about 60 percent of Imperial Sugar’s refining capacity and the company said that its financial results for the past two years reflect the lack of a fully operational refinery at the site. The company reported a loss of $21.2m last year.

However, the company remains upbeat for the year ahead, as it expects the Port Wentworth refinery to become fully operational in the second quarter of fiscal 2010.

President and CEO of Imperial Sugar John Sheptor said: “The Port Wentworth refinery has been rebuilt with new technologies and greater flexibility. The recently completed three-party joint venture in Louisiana has begun construction of a new refinery on property located at the current Gramercy refinery site. Through these efforts, Imperial will own or participate in two of the most state-of the-art sugar refineries in the US ensuring a dependable supply to our customers for decades to come.”

Rebuild progresses

Despite its widening loss and decreased sales for the full year – down 11.8 percent to $522.6m – net sales increased during the fourth quarter to $147.3m, compared to $124.8m for the same period in 2008 as the Port Wentworth rebuild progressed. Net sales for 2007, before the explosion, were $875.6m.

The company said the facility was operating at 55 percent capacity in October, following the reinstallation of all its granulated refined sugar packaging lines.

Through to November 30, the company said it had spent $188m of the $220m to $230m estimated cost of the Port Wentworth rebuild.

Explosion was ‘preventable’

Imperial Sugar came in for renewed criticism in September when a report from the US Chemical Safety Board (CSB), an independent federal agency that investigates industrial chemical accidents, found that the deadly explosion was “entirely preventable”.

The CSB said the explosion resulted from ongoing releases of sugar from inadequately designed and maintained dust collection equipment, conveyors and sugar handling machinery. In addition, it said that the company’s directors had not conducted emergency drills with employees and the explosion had disabled emergency lighting, making it difficult for workers to escape.

Related topics: Commodities, Cocoa & Sugar

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