Imperial Holly Sugar has offered its two northern California sugarbeet factories located in Tracy and Woodland to growers in those areas.
In an effort to shore up company-wide returns and turn assets into cash, Holly has requested that growers pay a land value for the two factories or they will be closed after the 2000 processing campaign.
Ben Goodwin, executive director of the California Sugarbeet Growers Association, said that there is general dismay, confusion and uncertainty being expressed by growers. They have been in meetings trying to determine their future as sugarbeet growers.
"In early discussions with the company, they indicated that all four factories might be for sale to California growers," Goodwin explained. "But in order to meet the timetable set by the company, only the Tracy and Woodland were in the initial offer."
Goodwin said sugarbeet production in California is still profitable. He said the Holly challenge is to deal with highly leveraged financial conditions of Imperial Sugar Company and their decision to turn assets into cash.
"The Woodland and Tracy factories apparently have more potential land value in reducing debt than they have operating value to the company," he continued.
Goodwin said a decision is needed quickly because growers will be planting their spring 2001 crop in May. Unless the company continues to operate the plants in 2001, there is insufficient time for growers to complete the necessary due diligence to finalize the sale, he said.
Imperial Holly President Roger Hill was unavailable for comment.