Florida Sugar Companies Now Have a Global Presence

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Florida sugar companies now have a global presence

NATION-WORLD By Susan Salisbury - Palm Beach Post Staff Writer

Posted: 12:20 a.m. Saturday, January 04, 2014

BELLE GLADE — Voreqe Bainimarama, the prime minister of Fiji, was visiting the Sugar Cane Growers Cooperative of Florida not long ago at its headquarters in Belle Glade, where cane fields stretch farther than the eye can see.

Tony Contreras, the cooperative’s president and CEO, was preparing to introduce him, and hoping to pronounce the Fijian’s name correctly.

“Just call me Frank,” Bainimarama said, offering the nickname he uses.

The dignitary from the South Pacific island nation was here as a seller of sugar to the world’s largest cane refining company, ASR Group, headquartered in West Palm Beach. Fiji is one of the more than 40 countries that supply ASR.

ASR, founded in 1998 as American Sugar Refining Inc., is jointly owned by the cooperative’s 46 growers and West Palm Beach-based Florida Crystals Corp, owned by the Fanjul family of Palm Beach. ASR’s goal was to begin the large-scale refining of their raw sugar.

Today, following a series of acquisitions, the company annually ships more than 4 million tons of sugar packaged under some of the world’s best-known brands to customers in 80 countries. Its revenues are more than $5 billion a year, and it has close to 4,000 employees worldwide.

Contreras, 62, and Luis Fernandez, 54, executive vice president and CFO of Florida Crystals Corp., headquartered in the same building as ASR, serve as its co-presidents.

Contreras joined the cooperative in 1984 and took the helm when founder George Wedgworth stepped down in January 2012. Fernandez has been with Florida Crystals since 1988. In western Palm Beach County, the cooperative’s 46 grower-members farm sugar cane, and it harvests, tranports and processes the sugar cane and markets the raw sugar.

Florida Crystals owns two mills and a refinery, also in the Glades, where it farms 190,000 acres it owns or leases.

Along with U.S. Sugar Corp., headquartered in Clewiston, Florida Crystals and the cooperative produce more sugar from sugar cane as well as its byproduct, blackstrap molasses, than is made in any other state. The U.S. Department of Agriculture estimates Florida will produce more than 1.8 million tons of raw sugar during the 2013-2014 season. About 90 percent of Florida’s 400,000-plus acres of cane is grown in western Palm Beach County.

Contreras explains that the cooperative’s business of selling raw sugar is “as different as night and day” from ASR’s refining business. ASR’s refineries are on deepwater ports where the sugar is received by ship from countries around the world.

“We take the raw sugar and process it into white. We package it into all different kinds of products and we distribute it,” Contreras said.

ASR’s 177 items available in grocery stores, such as the standard 5-pound bag of sugar, are under the Domino, C&H and Florida Crystals brands in the U.S. In Europe they produce under and own the Tate & Lyle, Sidul and Sores brands, and in Canada, the Redpath brand is theirs.

They’re especially proud of the iconic Lyle’s Golden Syrup, produced in London since 1883 and said to be in half the households in England where it’s doused on everything from pancakes to porridge. More than a million tins leave the factory every month, and it’s now available in a plastic “squeezy” bottle.

“The queen eats it every morning, I am told,” Contreras said. Since 1922 the syrup has carried a royal warrant, indicating it is a supplier to the royal family.

Innovative products, such as the Domino Sugar 4-pound canister, are also part of the mix. In November, the plastic flip-top Domino sugar dispenser featuring quick dissolve sugar and pourable brown sugar was launched. Its curvy container is ergonomically designed to fit into a consumer’s hand.

The partners created ASR in 1998 when they acquired a refinery on the Hudson River in Yonkers, N.Y. In 2001, ASR bought the most famous sugar brand on the east coast, Domino, as part of a $205 million purchase from Tate & Lyle North American Sugars. The deal included three refineries.

“Domino to us was like the holy grail — to think we could own it,” Contreras said.

Fernandez said, “We wanted to add value to our raw sugar. Florida Crystals and the Cooperative produce approximately 1 million tons of sugar a year. Now ASR’s refining capacity is over 5 million tons.”

In the last decade, ASR established a national footprint, then gained an international presence.

In 2005 the company expanded to California, where it purchased C&H Sugar, the West Coast’s leading brand.

In 2007 ASR expanded into Canada, with the acquisition of Redpath Sugar, marking its first venture outside the United States.

“We were buying companies with iconic brands in a business that we know,” Fernandez said.

Then came mill and refinery purchases in Mexico, London, Portugal, Belize and Italy, making ASR a bigger player internationally.

“We thought we knew about the sugar business before we went across the pond,” said Contreras, referring to the Tate & Lyle acquisition in 2010. “It taught us to think globally. The sugar business is mostly global. Yesterday we bought 20,000 tons of sugar from Madagascar.”

“Our compounded rate of growth has been 25 percent over the last decade,” Contreras said. Fernandez said the company is defined by its brands, product innovation and its reliable supply chain.

ASR supplies sugar and specialty to major food and beverage companies such as Kraft Foods, Hershey’s Kellogg’s Nestle and Pepsi and to grocery stores including Costco Wholesale, Sam’s Club, Publix, Aldi, Kroger and many more.

Including goods for the food service, industrial and specialty markets, it produces more than 750 products.

The recent acquisitions have pushed the company beyond just buying sugar from other countries, which is a fairly simple relationship, Fernandez said.

In Belize and Mexico, ASR owns and farms land and also purchases and processes cane from more than 5,000 independent farmers.

“ASR has been completely transformed in the last three to five years,” Fernandez said.

The growth has not been for the sake of growth, but to make the company better, Fernandez said

“The acquisitions were all strategic and synergistic and to make us more competitive,” Fernandez said.

ASR has made roughly 10 percent of the acquisitions it has considered, Fernandez said. Deals were rejected either because the buyers wanted too much money, or the business offered did not make sense strategically.

Making the acquisitions is the relatively easy part, while integrating each facility and business is more difficult.

“We are vertically integrated. We are farmers. We are millers and refiners and product developers,” Fernandez said.

The two companies have been in business together for 15 years and have not had any major disagreements.

“Our interests are completely aligned. We have like-minded people,” Fernandez said.

ASR Group Timeline

Founded in 1998 as American Sugar Refining, Inc., the company is jointly owned by Florida Crystals Corp., (64 percent) West Palm Beach, and the Sugar Cane Growers Cooperative (36 percent) of Florida, Belle Glade.

1998: Acquires a Yonkers, N.Y. sugar refinery from Refined Sugars Inc.

2001: Purchases Tate & Lyle North American Sugars, Inc., makers of Domino Sugar.

Includes refineries in Brooklyn, N.Y., Baltimore and Chalmette, La.

Forms Domino Foods, a marketing company

2004: Closes and sells the Brooklyn refinery

2005: Aquires C&H Sugar, the leading brand on the West Coast, and its Crockett, Calif., refinery

2006: Acquires CHR Hansen Specialty Sweetener Division, adding a line of molasses, malt and fondant sugars

2007: Expands into Canada with the acquisition of Tate & Lyle Canada, its Redpath brand and Toronto refinery

Expands into Mexico with the purchase of the San Nicolas mill and refinery in Veracruz

Acquires Sugar Stix, a customized table-top products business 2010: Florida Crystals produces the world’s first carbon free certified sugar

Purchases Tate & Lyle Sugars PLC including refineries in London, England and Lisbon, Portugal

2012: Aquires Streamline Foods, a food packaging and ingredient blending company in Canada

Acquires majority interest in Belize Sugar Industries, Ltd.

2013: American Sugar Refining changes its name to ASR Group

Acquires 50 percent ownership in a refinery in Brindisi, Italy

Source: ASR Group

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SUSAN SALISBURY

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