Sugar 101 Immerses Employees in the Business

Employees at Imperial Sugar Company’s sugar refinery in Port Wentworth, Ga., recently got a bird’s eye view of the sugar industry and what makes it tick.

The key takeaway? Demand is growing and supplies are somewhat tight.

Pat Henneberry teaches Sugar 101 to a class at the Port Wentworth refinery.

Each year at Imperial’s various facilities, the company’s commodities group gives a Sugar 101 presentation to orient new employees and update long-timers on the sugar supply chain and market trends that shape supply, demand and pricing.

Patrick Henneberry, senior vice president and chief of commodities management for Imperial, said that once employees settle into their particular jobs, a lot of them don’t get to see the big picture that helps put what they do into context.

“We think everyone should have an idea of who our competitors are, how the industry hangs together and how pricing occurs,” said Henneberry. “These presentations give them that opportunity.”

According to Henneberry, we are facing the tightest supply-demand situation seen in the last twenty years in the aggregated view of the world sugar industry. For the 2009/2010 period, total supply is pegged at 275 million tons versus total usage of 222 million tons. That leaves only 53 million tons of stocks at the end of the year, a very small cushion of supply.

Imperial’s Commodities Buyer Heidi Hancock, who presents portions of the Sugar 101 presentations, said employee feedback is positive and that some are asking for the next installment.

Brazil is the top producer of sugar, at nearly 37 million tons a year, and India is the biggest consumer at about 23 million tons.

The U.S. consumes around 10.5 million tons of sugar a year, producing about 75 percent of that domestically and importing the rest. Between cane refiners and beet processors, the U.S. has the capacity to refine up to 11.4 million tons of sugar annually.

One bit of good news for sugar producers is that high fructose corn syrup is losing ground to sugar in sweetened beverages and other products, with sugar usage in beverages growing at an annual rate of 20 to 25 percent.

Port Wentworth plant manager Jim Flynn listens as Henneberry explains how the price of sugar is influenced by world factors.

Imperial’s Commodities Buyer Heidi Hancock, who presents portions of the Sugar 101 presentations, said employee feedback is positive and that some are asking for the next installment.

“The presentation was informative,” said Jim Flynn, Port Wentworth refinery manager. “It gives you a feel for world dynamics and the big picture of how we fit in as a business. It gives you the other side of things – not just manufacturing – but also the pricing and purchasing of raw sugar. Based on the trends I saw, it looks like we could be holding our own, if not picking up business.”

Robert Burch, process engineering team leader at Port Wentworth, said there was a lot of information to absorb, but that it was “encouraging that business volume could increase. And that’s why we’re doing everything we can to get our melt rate up.”

Henneberry, who has been giving the presentation since he joined the company in 2002 – including two times to the board of directors – plans on developing a Sugar 102 program that covers pricing and operational issues in more depth.

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