Tags: IPSU | Imperial Sugar Company | ADM | Archer Daniels Midland | CPO | Corn Products International | food

Imperial Sugar Gains from Fair Trade Concept

By    |   Tuesday, 07 Jun 2011 01:01 PM

Take two world-class companies with more than 150 years behind each of them, give them a niche market, and let them fly. That’s what Imperial Sugar Company (IPSU) did when it teamed with the UK’s Edward Billington & Sons to create Wholesome Sweeteners, the leading U.S. brand of organic sugars and honeys. They wrote the book on fair trade sugar and honey, literally.

And these days, fair trade — the promise the products sold in developed markets do not abuse producers in developing countries — is what sells. IPSU was granted the option to buy the remaining half of Wholesome Sweeteners in July 2008 but that expired at the end of May.

The company says it will still remain vested and instead put money in the company’s growth and continuing dominance in organic markets; it just didn’t want the other half.

Letting the option go means that now there’s the possibility of a 100 percent buyout by a third party. Thus the expiration opens an opportunity for both parties to profit handsomely from their groundbreaking venture. Analysts seem to be happy with the idea. BWS Financial analysts have given IPSU a buy rating and a target of $24.

Despite shares bouncing around 52-week highs during recent weeks, at around $18, there is still wiggle room. Global sugar markets have come off of their 30-year highs in recent months but the American market is tight. IPSU has a contract to import and refine Mexican sugar, for example.

Looming sugar word war

Another issue facing sugar producers is corn growers. What started out as a clever marketing campaign some years back later led to producers of high-fructose corn syrup to seek permission from the U.S. Food and Drug Administration to change the name of the sweetener.

That has now turned into an all-out war, as producers of “natural” sugar, that is, cane sugar, seek to stop corn syrup makers from confusing the two types of sweeteners. Some members of the “natural” sugar industry took the corn syrup industry to court. That lawsuit is picking up steam and more companies are joining the crusade.

In addition to the Sugar Association and the American Sugar Cane League, American Sugar Refining, Amalgamated Sugar Company, Imperial Sugar Company, Minn-Dak Farmers Cooperative, and the U.S. Sugar Corporation have joined the complaint. Original plaintiffs include Western Sugar Cooperative, Michigan Sugar Company, and C&H Sugar Company Inc.

Companies named as defendants include Archer Daniels Midland (ADM), Cargill, Corn Products International (CPO), Penford Products (PENX), Roquette America, Tate & Lyle Ingredients Americas, and the companies’ lobbying and promotional organization, The Corn Refiners Association.


© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
Companies
Take two world-class companies with more than 150 years behind each of them, give them a niche market, and let them fly. That s what Imperial Sugar Company (IPSU) did when it teamed with the UK s Edward Billington Sons to create Wholesome Sweeteners, the leading U.S....
IPSU,Imperial Sugar Company,ADM,Archer Daniels Midland,CPO,Corn Products International,food,stocks,sugar
432
2011-01-07
Tuesday, 07 Jun 2011 01:01 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved