N.Y. loss of a sugar refinery sort of sweet for Baltimore

THE BALTIMORE SUN

The Domino Sugars sign that blazes in red neon from a Brooklyn, N.Y., sugar plant - as much an icon as a similar sign on Baltimore's waterfront - could soon go dark when the refinery on New York's East River shuts down.

But plans to stop refining sugar in Brooklyn by February will actually benefit the Domino plant in Baltimore, a company official said yesterday.

The plant in Locust Point is expected to pick up most of the production work now being done at the Brooklyn refinery, said Jack Lay, president and chief executive of American Sugar Refinery Inc., which owns the plants and markets sugar products under the Domino brand.

The Baltimore plant, which produces 1.5 billion pounds of sugar annually, is already equipped to handle the extra work without hiring more than its current 299 hourly workers, because the plant operates under-capacity now, American Sugar said.

The company plans to lay off about 190 workers in Brooklyn.

"The basis of the closing is to bring our capacity more in line with the demand for refined cane sugar in the areas we market," Lay said yesterday.

"Baltimore has the capacity to absorb the Brooklyn output. This means that Baltimore will be more effectively utilized than it has in the past."

The Brooklyn plant, which for the past three years has handled just a portion of the refining process, has a capacity to handle 950 million pounds of raw sugar a year. Over the past year, the plant has handled only 400 million pounds of raw sugar, Lay said.

Domino's Brooklyn facility will be the 15th sugar refinery shut down in the United States in the past 23 years, he said.

Cane sugar refineries have been hurt by competition from increased production of beet sugar, grown primarily in the Midwest and in California, as well as by imports and by higher costs of raw sugar, said Stephen Haley, an economist in the U.S. Department of Agriculture's economic research service.

"Refineries have been hard hit," Haley said. "It's a trend that's been going on for quite some time."

Business has also been hurt over the past few decades by increases in the use of high fructose corn syrup as a substitute for sugar in products such as soft drinks, Lay said.

American Sugar, which also runs Domino refineries in Yonkers, N.Y., and near New Orleans, has been exploring ways to cut costs since its parent, Florida Crystals Corp., purchased the plants from Tate & Lyle of London for more than $165 million in November 2001, Lay said.

"The [sales] volume really had been declining, as it has in most sugar refineries ... and everybody was fighting for the business," Lay said.

"We began to take a look at our cost structure and recognized that, unless we achieved a greater percentage of the market share, we would have to do something.

"We had to make a hard choice, and it unfortunately fell on Brooklyn."

The refinery is to shut down in February.

The packaging operation at the Brooklyn plant, which employs about 65 workers, is to stay open and continue to produce products that are made only there, such as sugar cubes, sugar packets and super fine sugar sold in stores.

The raw materials for those products will be shipped from Baltimore or Yonkers.

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