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Sugar stocks may be diverted after disaster

By Laura Crowley, 11-Feb-2008

Related topics: Business, Carbohydrates and fibers (sugar, starches)

A tragic explosion at Imperial Sugar's Savannah refinery last week could leave the plant out of action for some time, possibly requiring sugar to be diverted to competitors' facilities.

Four people were killed and more than 50 were injured in the explosion last Thursday evening. In the last reports from the scene, four people remained unaccounted for.

 

 

 

John Sheptor, Imperial's president and CEO, said: "We are all concerned for the welfare of our associates and our thoughts and prayers are with them and their families this evening.

 

 

"The extent of damage to the refinery is under investigation and the length of time it will be closed is currently unknown."

 

 

Imperial Sugar runs two sugar refineries - this one in Savannah and a second in Gramercy, LA.

 

 

 

According to media reports, industry members have said that several facilities owned by competitors could process the sugar that is normally handled by Savannah to ensure customers are not badly affected by the disaster.

 

 

 

Dow Jones mentioned Domino Sugar and a Yonkers New York plant, as competitor companies that could possibly stand in while Imperial Sugar's Savannah refinery gets back on its feet.

 

 

 

According to Reuters, Imperial Sugar stock was down 8 percent in Friday trading, but the blaze had little impact on the domestic sugar market, commodities traders said.

 

 

 

Although the cause of the incident is currently unknown, Sheptor said sugar dust in a silo where refined sugar was stored before packaging could have been ignited like gunpowder.

 

 

 

Last November, there was a similar explosion at Domino's Baltimore refinery, where the facility was substantially damaged. That plant has already returned to action however.

 

 

 

The US Chemical Safety Board completed a study of combustible dust explosions in November 2006. It identified 281 combustible dust incidents between 1980 and 2005 that killed a total of 119 workers, injured 718, and extensively damaged industrial facilities.

 

 

 

A quarter of the explosions occurred in the food industry, including several at sugar plants.

 

 

 

The body said that sugar dust is combustible and static electricity, sparks from metal tools or cigarettes can ignite explosion.

 

 

 

Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors.

 

 

 

The company acquired Savannah Foods & Industries, then the second-biggest sugar refiner, in 1997. This doubled the size of the company. Before that, Imperial took over Spreckels Sugar, a California beet company, in 1996.