High-value ingredients boost Tate & Lyle results

By Lynda Searby

- Last updated on GMT

Related tags: Speciality food ingredients, Maize, Sucralose, Starch

Splenda performance: High intensity sweetener volumes were particularly strong, up 17% on the first half of last year
Splenda performance: High intensity sweetener volumes were particularly strong, up 17% on the first half of last year
Tate & Lyle has delivered a solid first-half performance thanks to strong by-product returns, high-volume sucralose sales and performance-focused measures implemented under its new chief executive.

The British sweetener and starch producer posted a first half pre tax profit of £180M for the six months to the end of September, which represents a 32% jump compared with the same period of last year.

Sales increased by 14% to £1.54bn on the back of higher volume sales of speciality starch-based ingredients and high intensity sweeteners, as well as higher by-product values.

“A few things went our way,”​ a spokesman for Tate & Lyle told FoodManufacture.co.uk. “We’ve got a resilient stock, the commodities market went in our direction, and our new chief executive, who came in 18 months ago, has put in place changes to create a culture that is more focused on performance.”

Food ingredients

The London-based company, which sold its sugar refining business last year as part of a strategy to concentrate on food ingredients and reduce its exposure to commodity markets, organises its portfolio in two divisions: bulk ingredients and speciality food ingredients.

The bulk ingredients business produces sweeteners, industrial starches, acidulants, ethanol and their co- or by-products, namely corn oil, corn gluten feed and corn gluten meal.

While bulk ingredient volumes were lower, sales increased by 17% to £1.09bn, driven by firm demand for corn sugars in the US and Mexico and improved industrial starch margins particularly in Europe.

In addition, by-product prices were kept firm by high corn prices and high levels of demand.

Tate & Lyle’s strategy is to grow its speciality food ingredients business, supported by cash generated by bulk ingredients.

The past six months have seen sales of speciality food ingredients – which include corn-based food starches, dietary fibres under the Promitor brand, Splenda sucralose and Tate & Lyle’s new Purefruit fruit-based calorie-free sweetening ingredient – increase by 9% to £450M. Profit rose by 7%.

Sweetener

High intensity sweetener volumes were particularly strong, up 17% versus the first half of last year. But average selling prices for Splenda were lower as a result of the company’s strategy of securing long-term customer contracts with volume incentive arrangements.

In modified food starches, Tate & Lyle said sales volumes were driven by rising demand for packaged foods in emerging markets and demand from the snacks industry in Europe.

The company’s corn-based starches benefited from a shortage of potato starches in Europe. High sugar prices boosted demand for corn sweeteners, in particular in cost-optimisation projects.

Regarding full-year results, Tate & Lyle said it expects to deliver good growth for speciality food ingredients, driven by higher volumes and sales growth.

“As a result of H1, expectations for our full year figures will be adjusted upwards a little. So we’re comfortable with where we are, but we’re never complacent,”​ the spokesman told FoodManufacture.co.uk.

Related news

Related products

The Future of Healthy Snacking in Europe

The Future of Healthy Snacking in Europe

Glanbia Nutritionals | 16-Jun-2022 | Insight Guide

Our consumer study on healthy snacking in Europe reveals key insights into snacking motivations, the consumer landscape, and today’s top snacking trends—including...

Südzucker Consumer Trend Study 2022: Food & Drinks

Südzucker Consumer Trend Study 2022: Food & Drinks

Südzucker AG | 23-May-2022 | Technical / White Paper

Südzucker has conducted another research study around consumer needs and purchase drivers for processed foods and drinks, which will serve as yet another...

The benefits of acacia gum on gut health

The benefits of acacia gum on gut health

Alland & Robert | 08-Mar-2022 | Technical / White Paper

Consumers are looking for ingredients helping them living a healthy life, and are more and more aware that digestive health is key to global health.

Related suppliers

Follow us

Products

View more

Webinars