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Cargill buys fibre technology after Tate & Lyle wheat processing exit

By Shane Starling , 28-Feb-2013

The €55m Tate & Lyle Ventures (TLV) fund has sold off the Fugeia wheat extract business it bought into in 2008 to Cargill’s starches and sweeteners division for an undisclosed sum.

Despite striking a 2011 deal with Nestlé in November to use its Brana Vita arabinoxylan oligosaccharides (AXOS) branded, gut health-focused ingredient in 2011, TLV partner Simon Barnes told us a major partner was needed to take forward the ingredient and the technology that drives it.

“Tate & Lyle could have been that partner but since it divested of its wheat processing capacity a couple of years ago, that was not going to happen so we have been looking for investment in Fugeia since,” Barnes said.

Brana Vita also won both US GRAS (Generally Recognized As Safe) and EU Novel Foods approval since TLV came on board as part of a €3.5m 2008 investment in the Belgian start-up.

The terms of the undisclosed deal have not been revealed although strictly speaking, Cargill has bought the technology only, but Barnes said Fugeia’s staff have mostly moved on already and “we are regarding this as an exit for Fugeia.”

Cargill said in a statement it was eyeing AXOS for, “food or beverage products, including dairy and non-dairy beverages, ready-to-eat cereals, cookies and biscuits, bread and pastry, as well as dietary supplements and therapeutics, so delivering the health benefit potential of wheat bran across a range of products.”

“This is a very important acquisition for our starches and sweeteners business. We believe this technology will become a new product line for developing sustainable solutions that create value for our customers and consumers," said Kathy Fortmann, head of Cargill's starches and sweeteners business in Europe.

Willem Broekaert, co-founder and managing director of Fugeia, commented on the acquisition: “It is very rewarding to see that this technology is now well on its way to reaching the market…With its global R&D, production, sales, and marketing capabilities, Cargill is very well placed to make AXOS a success.” 

Consumer driven

After publication Cargill got in touch to say the deal was driven by increased consumer demand for fibres but that exact market plans were not as-yet formed.

"The acquisition is a natural extension of Cargill’s starches and sweeteners’ strategy to continuously explore new markets and technologies in order to develop the full potential of its products. We believe this technology will become a new product line for developing sustainable solutions that create value for our customers and consumers," the company said.

"There are a wide range of food and feed applications where fibres can play a key role. We will now enter a research phase to examine these potential applications, and how they are received by consumers. After this research is complete we will be in a better position to outline our future plans." 

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