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Two sugar plants may shut doors: Hundreds of workers, growers face trouble

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The Spreckels sugar processing plants in Woodland and Tracy will be shut down by their corporate owner at the end of this year, costing hundreds of employees their jobs, unless California sugar beet farmers agree to buy the facilities.

If the two plants close, it could wipe out the sugar beet industry in Northern California, growers said Friday.

Texas-based Imperial Sugar Co., owner of the processing plants, wants to sell the plants to help reduce its heavy debt, said Bill Schwer, the company's executive vice president.

Imperial Sugar's chief executive, James Kempner, and other top officials met with a group of sugar beet farmers at Sacramento International Airport a week ago to tell the growers of their decision and offer them an opportunity to buy the facilities.

The two parties will meet next week when company officials will turn over financial information about the plants' operations and possibly set a sales price.

"If they don't want to do a transaction, then we will stop processing at the end of the year," Schwer said. A small portion of the facilities will likely be kept open to handle sugar processed at two other company plants in Southern California, he said.

The head of the California Beet Growers Association said his members are interested in buying the plants if they can.

"We have a ways to go," said Ben Goodwin, executive manager of the association. "We don't have any value on the plants, no operational numbers. Are they profitable?"

Meanwhile, a union official representing 200 full-time and 300 seasonal employees at the Spreckels plant in Woodland said Friday he isn't optimistic that the growers will be able to save the day.

"We know they are going to shut it down," said Subhash Sharma, a warehouse employee and vice president of the Sugar Workers Local 179 of the AFL-CIO. "All that (employees) care about are their benefits, whether they will give us severance pay."

Most of the year-round employees have worked at Spreckels for more than 20 years -- some more than 30 years -- but are still too young to retire, he said. "Those over 45 will have a hard time getting another job," Sharma said.

The Spreckels plant in Tracy, south of Stockton, currently has 140 year-round employees and 220 seasonal workers.

The farmers also worry about the impact the plant closings would have on their livelihood.

Goodwin estimates that about 200 farmers, growing sugar beets on 60,000 acres, last year delivered about $68 million worth of the crop to the two plants.

Imperial Sugar's decision "came as kind of a shock" said Jeff Miller, whose family has been growing sugar beets in Colusa County for more than 50 years.

"I hope something happens," Miller said. "What it is going to do is shut down our industry up here."

Miller said that won't mean the end of the farm operation, "but it really puts us in a bind."

Like many other farmers, the Millers grow a wide variety of crops. Currently, however, beets are one of the most profitable commodities. Closure of the plant would mean replacing sugar beets with another crop that will bring in less revenue.

Imperial Sugar, on an acquisition kick the last three years, has been feeling the heat from Wall Street about its performance. Last October, the company's board of directors suspended payment of the quarterly dividend to use the savings to reduce long-term debt.

Traded on the American Stock Exchange, company shares were as high as $9.75 over the past year but closed Friday at $3.

For Imperial Sugar, the financial attraction of selling its properties is not in the factories themselves but the surrounding land, said Schwer, the executive vice president.

The Woodland plant, first opened in 1937, sits on about 700 acres of land. The plant in Tracy occupies about 1,200 acres.

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-- Dee (T1Colt556@aol.com), February 12, 2000

Answers

Thanks so much for the heads up, Dee. Some of my farmers in the Tulelake area grow sugar beets. Many were already going to switch because they were told there would be a glut of sugar on the market this year.

Alternatively they grow potatos, onions, horseradish or grain. There has not been much profit in potatos in past years. They are limited in what they can grow because of the elevation and short growing season. This will not be good. Poor guys have gotten beaten up each year of the past decade on regulation and markets.

-- marsh (siskfarm@snowcrest.net), February 12, 2000.