Tate and Lyle talks sweeteners and starch sale with Syral

The ingredients giant announced that it was considering the sale of all or part of its Food and Industrial Ingredients, Europe division (TALFIIE) in October last year. The division is almost entirely a commodity sweeteners and starches business. If the divestment goes ahead for the anticipated £200m to £220m (€293m to €323m) it will be most decisive move yet towards a refocusing on value-added ingredients. This has already led to acquisitions and more are said to be in the pipeline. Tate and Lyle's operations in Koog, The Netherlands - its main corn-based starch production site in Western Europe, Morocco, and its Eaststarch joint venture (Hungary, Slovakia, Bulgaria, Romania and Turkey) are excluded from negotiations. Since TALFIIE's Belgian entity includes the head office, shared service centre and billing entity, which is also excluded from negotiations, consultations are also underway on restructuring measures that will be necessitated, should the go ahead materialise. The initial announcement of the planned divestment followed a review of the business after the EU's adoption of a new sugar regime in July this year. According to Tate & Lyle, the review determined that the firms TALFIIE division is primarily a commodity led business, and as such is no longer an essential element of its strategy to focus on value added ingredients. Chief executive Iain Ferguson indicated that the decision to explore a disposal of the division builds on the consultation on the surrender of quota in the firm's Eastern Sugar joint venture. The company has said it will continue to develop its value added food ingredients business in Europe through its Global Food Ingredients Group, which includes Cesalpinia Foods. Last month Tate & Lyle announced its planned acquisition of an 80 per cent stake in GC Hahn, a German family-run specialty ingredients firm. Moreover the firm recently announced that it is building a new R&D centre in Lille, France, to focus on ingredients for health, wellness and nutrition and will cater to the beverage, dairy, bakery and convenience sectors. The new centre is expected to be operational by September this year. The firm will announce its preliminary results for the year ended March 31 on May 23. It has indicated that sales and profits of its sucralose product Splenda are expected to only modestly exceed the prior year. In the year ended March 31 2006, TALFIIE posted sales of £719m (€1.1bn). Profit before interest came in at £46m (€68m). Syral is a subsidiary of French agro-industrial co-operative Tereos, and is said to be the fourth largest producer of glucoses and other starch-based ingredients in Europe. It's turnover for the year ended September 30 2006 was €177m.