US Sugar, which harvests more than one-third of Florida's sugar cane crop, moved into refining as a way to increase profits after a decade of flat prices for US raw sugar.

The refinery, which opened in September and started making food grade sugar in November, has a current annual capacity of 540,000 short tons.

"It has the ability to double in size," said Murray Brinson, senior vice president in charge of sugar processing. The company deliberately left space in the 12-story high building for equipment to double the refinery's output."That would make it the largest in the world," Brinson said.

Bob Buker, senior vice president of corporate affairs, said market conditions will determine how quickly the company will expand capacity. "We intend to take it up in stages," he said.

US Sugar is still under contract toprovide 300,000 tons of raw sugar each year to Savannah Foods, which Texas-based Imperial Holly Corp. purchased in late 1997.

When that contract expires in a couple of years, "we'll refine it ourselves," Buker said. Buker and other company officials declined to say how the much the new facility cost, but one local newspaper reported that the new refinery's value may exceed $125 million. Because the refinery is the first to be built in the United States in 25 years, it has more advanced technology than older facilities.

Company officials also travelled to Europe and South Africa looking for innovative new systems.

"I don't know if there's a perfect refinery," said Don Griffin, a manager in the sugar processing department.

"But it's the most perfect facility that's been built to date." US Sugar was able to increase efficiencies by building the refinery next to its raw sugar mill and connecting the two. Changes made within the mill allow the company to begin the refining process with a purer grade ofraw sugar.

In the past, most refineries were built near major population centers, such as in the Northeast. Because of potential contamination problems with shipping bulk cargoes of refined sugar, it made more sense to ship raw sugar instead.

But improvements in technology have made shipping bulk refined sugar a less daunting task, company officials said. The new plant's daily refining capacity is 1,800 short tons and US Sugar plans to keep it operating 300 days per year. The facility is designed to add capacity in three 600 short ton increments, up to a maximum of 3,600 short tons.

The most expensive increment would be the second stage, bringing capacity up to 3,000 short tons, because of the need to add new drying equipment, Griffin said.

US Sugar decided to build the refinery after Congress adopted the landmark 1996 farm bill, Buker said. That legislation eliminated "marketing allotments" that determined how much sugar a firm could produce and sell. Before those reforms, there was a legal questionwhether U.S. Sugar could even enter the refinery business. Barely five months after starting operation, the refinery is performing above expectations even if it is not at 100 per cent capacity every day. US Sugar has joined with the similarly named United Sugars Corp, a growers cooperative headquartered in the upper Midwest, to market its refined sugar. The new refinery "shows we're in the sugar industry for the long run," Buker said.