Sidney Factory Faces Bright Future

By Don Gorsek Sidney Holly Sugar District Manager

What a challenging year the sugar industry, Imperial Sugar Corporation (our parent company) and Holly Sugar faced. Through all of this, the Sidney factory remains stable in the sugar business through a strong relationship with the growers and the community.
The sugar industry recently experienced 22-year low sugar prices, due to an oversupply of sugar in the U.S. market. A year ago both beet and cane operations had record crops, along with required minimum import sugar, NAFTA sugar from Mexico and stuffed molasses imported from Canada, the U.S. market was flooded.

Imperial Sugar went into Chapter 11 restructuring this year, coming out in late August, 2001. Two beet factories in California, Tracy and Woodland, were closed along with a cane refinery in Clewiston, FL. Imperial offered Michigan Sugar for sale to the growers around Saginaw, MI. The Holly Sugar factory in Worland, WY, was offered for purchase by their growers. This process is similar to the sale by Tate and Lyle Corporation (British Sugar) of the six Western Sugar factories to the growers in Montana, Wyoming, Colorado and Nebraska. There are advantages for growers to operate as a sugar co-op business. In turn, the grower owned co-op also accepts all the risk in processing the beets into sugar.

Last campaign, the Sidney factory worked successfully through a tolled beet contract and a well managed cooperative effort with the growers. We had a severe four-day freeze during early October harvest last year. Excellent communication with the grower representatives and great effort by the factory employees made for a good run on the frozen beets. Priority was given to processing the grower beets. We completed the Holly beets afterwards, which did not store as well with the warm weather we experienced in mid-January. Again, sugar prices hurt, but the growers and the factory did very well considering the circumstances. A big thanks to all involved.

This past intercampaign, we continued integrating operations and maintenance involvement in establishing priorities and determining projects to improve factory operations. With cutting costs, we had to make good decisions on how to spend maintenance dollars. Several employees traveled to California to bring back various parts and equipment to help improve several processing systems. Some uses of the equipment included screw conveyors, beet screening, process control, instrumentation and pumps. On top of all other issues, natural gas costs increased by 40% through the past year. We worked to improve boiler efficiencies, evaporator operations, and factory mechanical integrity. Everyone here at Holly put forth an excellent effort to maintain the factory equipment and improve factory operations as much as possible within our budgets. We feel we are prepared for a successful campaign.

Looking forward, sugar prices should improve with better balance of domestic sugar supply. The court system stopped the import of “stuffed molasses” out of Canada. The shutdown of several factories and normal (lower) crop yields aided in reducing U.S. sugar inventories. As a caution, we need to continue watching the influence of NAFTA sugar out of Mexico and work towards a fair and stable “Sugar Act” portion of the U.S. Farm Bill.

From a local perspective, our corporate office is currently reviewing approval for modernizing our sugar crystallization by installing a “continuous vacuum pan” (CVP) here at the Sidney factory. The CVP will replace two batch pans used for intermediate sugar boiling. The new pan will provide the factory with greater flexibility to process variable quality beets and improve sugar yield (extraction). Beets quality drops during the winter storage in the piles. This summer, we purchased additional passive ventilation pipe to move cold air through the beet piles, which improves the conditions for storage. To complement this project, the CVP will make the factory more flexible and capable of processing beets, when poor weather conditions result in lower quality beets harvested out of the beet piles. The CVP will be an excellent improvement to Sidney factory operations.

Through the “tolled frozen beet contract” last campaign, I feel the growers and factory employees recognize the potential of the Holly Sidney beet operations. The commitment of our employees and support from our growers creates an environment for investment in our plant. The continuous vacuum pan will be the first step in providing additional stability and taking advantage of our potential here in Sidney. At the same time, we are preparing plans and designs for increasing capacity for beets and the Holly Sugar factory operations. We will be prepared when the opportunities arise. We have an excellent opportunity for a prosperous future here in Sidney.