EXHIBIT (a)(3)

 
                  [LETTERHEAD OF SAVANNAH FOODS APPEARS HERE]
 
                                                              September 18, 1997
 
Dear Stockholder:
 
  On behalf of the Board of Directors of Savannah Foods & Industries, Inc. (the
"Company"), I am pleased to inform you that the Company entered into an
Agreement and Plan of Merger, dated as of September 12, 1997 (the "Merger
Agreement"), with Imperial Holly Corporation ("Imperial Holly") and IHK Merger
Sub Corporation, its wholly owned subsidiary (the "Purchaser"), pursuant to
which the Purchaser has today commenced a cash tender offer (the "Offer") to
purchase 50.1% of the outstanding Common Stock of the Company (the "Shares") at
a price of $20.25 per Share, net to the seller in cash. The Offer is
conditioned upon, among other things, the tender of at least 50.1% of the
Shares.
 
  Following the successful completion of the Offer, upon the terms and subject
to the conditions contained in the Merger Agreement, the Purchaser will be
merged with and into the Company (the "Merger"), with the Company as the
surviving corporation. At the effective time of the Merger, each remaining
issued and outstanding Share shall be converted into the right to receive
either (i) $20.25 of Imperial Holly Common Stock (the "Stock Consideration"),
subject to a collar of $13.25 to $17.25 per share of Imperial Holly Common
Stock, or (ii) $20.25 in cash (the "Cash Consideration"), subject to proration
and dissenters rights. The aggregate number of Shares to be converted into the
right to receive the Stock Consideration will be equal to 30% of all
outstanding Shares at the time of the Merger; and the number of Shares to be
converted into the right to receive the Cash Consideration pursuant to the
Merger will be equal to 19.9% of all outstanding Shares at the time of the
Merger.
 
  YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF THE
COMPANY. THE BOARD HAS ALSO UNANIMOUSLY APPROVED THE OFFER, THE MERGER AND THE
MERGER AGREEMENT AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
 
  In arriving at its recommendation, the Board of Directors gave careful
consideration to the factors described in the enclosed
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
which is being filed today with the Securities and Exchange Commission,
including, among other things, the written opinion of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ"), the Company's financial advisor, that
the consideration to be received by the stockholders of the Company pursuant to
the Offer and the Merger is fair to such stockholders from a financial point of
view.
 
  Additional information with respect to the Board's decision is contained in
the enclosed Schedule 14D-9 and we urge you to consider this information
carefully.
 
  In addition to the attached Schedule 14D-9, enclosed also is the Purchaser's
Offer to Purchase, dated September 18, 1997, together with related materials,
including a Letter of Transmittal to be used for tendering your Shares in the
Offer. These documents set forth the terms and conditions of the Offer and
provide instructions as to how to tender your Shares. I urge you to read the
enclosed materials carefully and consider all factors set forth therein before
making your decision with respect to tendering your Shares pursuant to the
Offer.
 
  On behalf of the Board of Directors, management and employees of the Company,
I thank you for the support you have given the Company.
 
                                        Very truly yours,
 
                                        [SIGNATURE OF WILLIAM W. SPRAGUE
                                        APPEARS HERE]
                                        William W. Sprague III
                                        President and Chief Executive Officer
 
                   P.O. Box 339, Savannah, Georgia 31402-0339