Mexican buy boosts ASRs output by 75,000 tons
Mexico which will boost the firm's output by some 75,000 tons, and
allow it to take advantage of Mexican and US market integration.
The company, based in New York, has not disclosed a figure for the purchase of Ingenio San Nicolas, but said the deal will help service customers throughout North America. The acquisition is particularly significant now that the Mexican and United States sugar markets will merge under the North American Free Trade Agreement (NAFTA) which is effective from January 1, 2008. Integration will see the removal of trade restrictions between the two countries. "The sugar industry is an important part of the Mexican economy and will play a significant role in the combined US - Mexico sugar market," co-president Antonio Contreras. This is not the first high profile buy-out of the year by ASR. In April the firm agreed to buy a refinery in Canada from British ingredient firm Tate & Lyle. The Red Path refinery was bought for some £131m (C$298m, US$178m). Luis Fernandez, co-president, said: "Our goal is to effectively service our multinational customers whose operations span all of North America. This acquisition furthers our strategy to seamlessly provide our customers with quality sugar products and excellent customer service throughout Canada, the United States and Mexico." Fernandez added: "This acquisition is an extension of our strategy to be the premier sugar producer and supplier in North America, as evidenced by our recent acquisitions of Redpath Sugar in Canada and C&H Sugar in California." ASR, owned by Florida Crystals Corporation, has six sugar refineries in the US, Canada and Mexico, which produce more than four million tons of refined sugar. Sugar Cane Growers Cooperative of Florida harvests, transports and processes sugarcane. It then sells raw sugar to ASR - widely known as Domino - which it co-owns together with Florida Crystals. Refined sugar is then marketed nationwide through Domino Foods. Based in Yonkers, New York, ASR is the largest cane sugar refiner in the United States. The United States Department of Agricultures has said an integrated market would better "rationalize production, enhance economic efficiency, promote growth, and raise consumer income throughout the continent." The department has also predicted integration would increase Mexican income per capita by seven per cent. Mexican and US harvest cycles for sugar are said to be complementary.