Tate & Lyle completes CCI acquisition

By Anthony Fletcher

- Last updated on GMT

Related tags Tate Lyle Value added Tate & lyle

Tate & Lyle's acquisition of US speciality food ingredients
firm Continental Custom Ingredients (CCI) could open new
opportunities in the value added dairy ingredients sector.

CCI is a leader in dairy stabilisers and emulsifier systems and also has expertise in beverage flavours and vitamin and mineral fortification. The firm will now trade as Tate & Lyle Custom Ingredients.

"We are focused on delivering ingredient solutions to our customers and have identified the dairy industry as a key growth area,"​ said D Lynn Grider, president of Tate & Lyle, food & industrial ingredients, Americas.

"The acquisition of CCI enables us to advance these initiatives by bringing to Tate & Lyle new expertise in the areas of dairy stabilisers, hydrocolloids systems, emulsifiers, vitamins and flavours."

UK-based Tate & Lyle is increasingly keen to emphasise its role not as a commodity supplier but as an ingredients solutions provider, and sees this acquisition as a perfect fit. Reform of the EU's outdated sugar regime, which will see the price of the commodity cut by 36 per cent, has compelled ingredients firms to diversify and innovate, and Tate & Lye has not been slow in doing so.

But the firm also has other concerns. Its ability to retain a monopoly on the lucrative global sucralose market with its patented Splenda product has been called into question.

In an exclusive interview with FoodNavigator, the president of Pharmed Medicare claimed that his company has developed an alternative patent-pending process that would put the firm into direct competition with the UK ingredient giant. However, Tate & Lyle remains bullish that it can continue to dominate the value-added ingredients market through innovation, and that its business plan of expansion into new value added ingredient sectors remains sound.

Tate & Lyle says it was also attracted to CCI's established sourcing network, which should enable the firm to develop ingredient systems with a broader range of functional food ingredients. In other words, the acquisition should expand both the company's market reach and its functionality.

"The addition of CCI to Tate & Lyle vertically integrates us closer to our shared customer base and to the dairy industry,"​ said Tom Doxsie, senior vice president of food ingredients at Tate & Lyle, Food & Industrial Ingredients, Americas.

"The combination of our research & development expertise and broad ingredient portfolio, coupled with CCI's intimate dairy knowledge, speed and agility to market, provides a solid foundation for growth."

This week's announcement follows the initial acquisition announcement of 5 December 2005. The acquisition is expected to cover Tate & Lyle's cost of capital in the first full year of operation.

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