Tate & Lyle is planning to re-start production at its mothballed sucralose plant in the US, as hot demand for the sweetener means it needs more capacity from two global sites.
The sweetener giant put a pause on production at its site in McIntosh, Alabama, in May 2009, to concentrate production at its new, state-of-the-art facility in Singapore. The reason was given as a “breakthrough in sucralose manufacturing yields”. Over the previous year its facilities had seen yield improvements of 25 per cent, helped by the advent of more efficient fourth generation technology.
In its annual results statement released this morning, Tate & Lyle said it has undertaken a “comprehensive review” and the McIntosh site will be up-and-running again in the first half of financial year 2013 (mid 2012 by the calendar year).
The company does not reveal capacity figures, but decision is said to be due to an increase in demand. It says it has a strong customer pipeline of new and reformulated products. There is a long-term global trend towards reducing calorie content in foods and beverage in an effort to help stem the rising tide of diabetes and obesity in both developed and emerging markets.
In addition, currently high sugar prices may mean some manufacturers are looking to use a higher proportion of sweeteners in blends so as to keep costs down. It is also seen as a benefit that it is very stable under varying heat conditions, a property that makes it attractive for use in warmer climates, such as much of Asia.
Tate & Lyle says sucralose has increased its value share of the high intensity sweeteners market in the last year, from 27% to 28%, and Splenda sucralose’s share of the global market for sucralose is still around 90%.
In its results statement Tate & Lyle says it saw good sales volume for high intensity sweeteners during the year, but average selling prices were lower than the previous year as it had been securing long-term sucralose contracts with volume incentive arrangements.
“As a result, sales by value decreased by 1% (3% in constant currency) to £185 million (2010 – £187 million),” it said.
The decline in selling prices for sucralose is expected to moderate towards the end of this financial year as contracts are renewed.
A company spokesman told FoodNavigator: “The McIntosh plant uses exactly the same process as Singapore. In fact Singapore is based on the McIntosh technology, and both plants will enjoy similar levels of efficiency.”
It kept a skeleton crew on board, however, and maintained the site so it could re-start production if necessary. The re-start will cost the company £3m.
The added that recruitment is starting immediately. The spokesperson said: “We are looking to hire staff with a solid understanding of process technology and engineering who have experience of working in manufacturing facilities. When the plant begins production in 2012 we will have a hundred people working at our US sucralose production facility.”
Across all operations Tate & Lyle has reported a 5% increase in sales values (constant currencies) over the last year, to £2,720m. Adjusted operating profit was up 17% to £321.