Splenda manufacturer Tate & Lyle on Wednesday said it has made a strong start to the financial year, with first quarter results well ahead of last years figures.
The news comes after a difficult year for the firm last year, which saw profit fall by 79 per cent to pound42m (euro62m) due largely to reform of the European sugar market.
But at its Annual General Meeting this week, Tate & Lyles chairman Sir David Lees said that a continuing strong performance from the companys Food & Industrial Ingredients Americas and from sugar trading have set it off to a good start this year, adding that it is continuing work on its "appropriate response" to the changes in the EU sugar regime.
"We continue to view the future with confidence and remain committed to our target for the profit contribution from total value added products to increase by 30 per cent in the year to March 2007 from the pound161m (euro236m) reported last year," he said.
Tate & Lyle said it has a number of expansion projects under way across its business, which it expects will stimulate longer-term growth in its value added segment.
The company also said its two expansions at the McIntosh, Alabama sucralose facility have been completed on time, with the first of these now operating at capacity and the second in a commissioning period that is expected to last for several months.The firms new sucralose facility in Singapore also remains on schedule for mechanical completion in January 2007.
"The increased production capacity from these investments will enable us to build further the customer base and Splenda sucralose brand. We have specifically designed the Singapore plant with the potential for its capacity to be doubled, if required," said Lees.
"Our other US expansion projects in Sagamore and Loudon and the recently announced investment in a new corn-wet mill in Fort Dodge, Iowa continue to progress satisfactorily. Total investment in these three projects will be some pound250m (euro366m). This reflects our firm commitment to deliver against our growth strategy and in particular to grow the contribution from value added products," he added.
The UK based ingredients giant last year registered a pound272m (euro398m) impairment charge on its European assets due to the upheavals of the EU sugar reform.
But the group has been making a conscious attempt to diversify its operations away from sugar. Tate & Lyle's emphasis is now very much on value-added products.
And despite a difficult operating environment, in May this year the company announced a 16 per cent increase in underlying profit to pound295m (euro432m) due to high world sugar prices and the continued strong demand for its sucralose product.