Reporting its first half results, Tate & Lyle says it has delivered a ‘solid performance’ in the first six months against the backdrop of a strong first half last year, softer market conditions in Europe,
The company reported that its speciality food ingredients business saw volumes increase by 3% - with sales up by 5% (6% in constant currency) to £471 million (€591m). Bulk Ingredients operating profit grew by 6% (7% in constant currency) with strong performance from sweeteners.
Javed Ahmed, chief executive of Tate & Lyle said: “Despite facing a number of headwinds this year, I am pleased that the business continues to perform solidly.”
The Speciality Food Ingredients segment comprises three broad product categories namely: starch-based speciality ingredients; high intensity sweeteners; and food systems.
The firm said modified food starches saw steady volume growth in the US and strong growth in Asia, while the broadening of product offerings in Latin America also helped to secure sales with new customers.
“Our speciality fibres continue to benefit from the global health & wellness trend with particularly strong growth in China and Europe in polydextrose volumes whose versatility allows broad use in food and beverage fibre fortification projects and as a low calorie bulking agent in sugar replacement projects,” said the Tate & Lyle report.
High intensity sweeteners saw operating profit fall as a result of the lower volumes and the additional fixed costs associated with the restart of its US-based McIntosh facility.
In its outlook report, the company said its Speciality Food Ingredients business expects continued challenging market conditions in Europe, but noted that overall “we expect to achieve steady volume growth and solid sales growth for the full year.”
The ingredients giant said European bulk corn sweetener volumes were 7% lower as a result of a lower allocation of quotas in certain non-EU markets, in addition to a strike at its joint-venture plant in Turkey.
Sales of industrial starches, acidulants and ethanol fell by 3% (decreased by 2% in constant currency) to £312 million (€391m) with volumes 7% lower.
“Industrial starch volumes decreased as we continued our strategy to gradually switch corn grind in both Europe and the US from producing industrial starches to higher margin speciality food starches,” said the firm.