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The bitter end

| Friday, Dec. 27, 2002

SUGAR LAND, Texas — The company that gave this Houston suburb its sweet name has shut down its 77-year-old processing plant, marking the end of sugar refining in Sugar Land.

The Imperial Sugar refinery processed up to 3 million pounds of granulated, brown and powdered sugar each day. It refined its last bit of raw sugar last week.

"This was truly a business decision," said Duffy Smith, executive vice president of operations at Imperial, the largest processor and marketer of refined sugar in the United States. "It's an industry that's fraught with overcapacity. We, as a member of the industry, had the same problem."

The shutdown cost more than 300 people their jobs and represented the end of an era at 158-year-old Imperial Sugar, one of the state's oldest corporations still operating at its original site.

Imperial is consolidating its refining operations in Gramercy, La., and Savannah, Ga. The company, which has 2,200 employees nationwide, will keep its headquarters in Sugar Land and continue to run a packaging and shipping operation here, with about 100 workers.

The employees who lost their jobs will be paid through the end of January.

Gloria Nunez, a 51-year-old machine operator at the refinery, is a third-generation Imperial employee. Her grandmother, both parents and four uncles either work or have worked there. One of her uncles, 81-year-old George Morales, is in his 61st year as an Imperial security guard.

"We're more like family than co-workers there," she said. "I've worked there since I was 19, and this really hurts because something like this affects everybody. But I have faith. I know God's going to have something for me — if it's not Imperial, it will be something else."

Closing the refinery will not make much of a dent in Sugar Land's economy. Sugar Land, which has seen a 158 percent jump in population to more than 63,000 since 1990, has enjoyed an influx of jobs as other businesses moved in, including oil company Unocal; Fluor Daniel, a unit of engineering and construction giant Fluor Corp.; and K-Tec Electronics.

Walter McMeans, 73, and his wife, Jane, moved to Sugar Land in 1965 when Imperial was still the town's dominant industry.

"It was the godfather of the city," McMeans said. "I would say today the town does not look upon the sugar company as they did in the beginning. They know it was here in the beginning, and it helped Sugar Land in its development stage, but now a lot of other companies are in the city that produce jobs."

The U.S. sugar industry is struggling with low sugar prices in a market glutted with imports. For Imperial Sugar, that meant the company was refining too much sugar for too little profit.

Imperial, which sells sugar under such brand names as Imperial, Dixie Crystals and Diamond Crystal, filed for Chapter 11 bankruptcy a year ago, citing $250 million in debt. It emerged from bankruptcy eight months later. But it reported a third-quarter loss of $1.1 million this year.

Imperial has been milling or refining sugar in Sugar Land since the mid-1800s. The refinery was built in 1925. But the company stopped growing sugar cane around here a few years later.

Raw sugar was instead brought in by ship to Houston and then transported by rail to Sugar Land to be refined, increasing production costs.

The Louisiana refinery remains near sugar cane crops. And the Georgia refinery, while not near crops, is closer to a port, cutting transportation costs.

The company has not decided what to do with the now-vacant refinery.

"I'm pretty sensitive to not wanting to create an eyesore there," said Imperial chief executive Bob Peiser. "On the other hand, buildings are difficult and expensive to maintain. There's a lot of talk of turning it into a museum or creating something else there, so we'll work with the community."

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