After 19 years and several false alarms, the sugar industry will return to Moses Lake in 1998, officials said Monday.
Columbia River Sugar Co., a local cooperative of 30 farmers, and a national sugar producer have struck a deal to construct and operate a refinery near the site of the Utah and Idaho Sugar Co. factory, which closed in 1979.
Production of white table sugar will commence in the fall of 1998 under a partnership formed between Columbia River and Holly Sugar Corp., a Colorado Springs-based subsidiary of Imperial Holly Corp.
The project will cost nearly $100 million, officials said. The plant will employ about 200 people and return the lucrative sugar beet to the fertile Columbia River Basin.
“The growers have been persistent over the years and now they’re finally going to see it come to fruition,” said Marvin Price, general manager of Columbia River.
At full production, the factory will process 6,000 tons of beets daily, with design capacity for much more. The company will produce 2.5 million 100-pound bags of refined sugar each year, less than 2 percent of national consumption, Price said.
Holly will sell the refined sugar under its own name, or under supermarkets’ private labels.
Farmers will need to grow at least 25,000 acres of beets annually to keep pace with the refinery, Price said. That’s four times more than they currently grow for Holly factories in California, but half what they grew for U&I in the 1970s.
Holly Sugar officials could not be reached for comment. But a statement released by the company said it would form a partnership with the growers to manage the venture. Columbia River will be general partner of the partnership, known as Pacific Northwest Sugar Co.
Equipment for the factory will come from a refinery near Phoenix and one outside Santa Marie, Calif., Price said. Holly Sugar closed the California refinery in 1993.
The St. Paul Bank for Cooperatives, which is part of the federal Farm Credit system, will provide financing for construction of the factory.
Moses Lake farmers have had an alliance with Holly since 1993 when they began shipping sugar beets to the company’s California refineries.
The proposed Moses Lake refinery ends a struggle to revive an important Grant County industry. The loss of U&I devastated the economy, throwing 500 people out of work.
Since that time, farmers, investors and port authorities tried at least three times to return beets to the Basin without success.
Columbia River two years ago said it would build a new factory in time for the 1995 harvest. But lenders were reluctant because the federal system of marketing quotas endangered the investors ability to operate at full production.
The quotas, which control domestic production and price, were dropped earlier this year as supplies dwindled. The government, however, has the authority to reinstate the quotas in the future unless Congress changes the system.
Price said Moses Lake farmers will be less dependent on federal programs because they have the highest yields in the nation. Beet yields at harvest, which continues this week, average 35 tons per acre, double the national average.
Holly Sugar is part of the Imperial Holly chain of seven refineries, employing 1,500 people. Imperial reported a $5.4 million loss on sales of $587 million for the year ended March 31, 1995.