Tate & Lyle to boost Asian food systems through Chinese joint-venture

By RJ Whitehead

- Last updated on GMT

Related tags Tate & lyle

Tate & Lyle to boost Asian food systems through Chinese joint-venture
Through the complex acquisition of a majority stake through China’s Jiangsu Howbetter Food Co., Tate & Lyle can now boast a platform to boost its food systems business in the country.

The British-based speciality food ingredients provider has signed a joint-venture agreement with Xuzhou Yitong Food Industry after buying into a 51% equity interest with Howbetter, one of the leading food systems businesses in China. The joint-venture will be called Tate & Lyle Howbetter.

Under the terms of the agreement Tate & Lyle will acquire 22% of its equity interst from Yitong and the remaining 29% from S.B. International, a wholly owned subsidiary of a Europe-based food business that has been a shareholder in Howbetter since 2009.

Government approval

Furthermore, Tate & Lyle also has an option to acquire Yitong’s remaining 49% equity interest in Howbetter at a later stage, although the transaction is subject to governmental approval, which the companies hope to received in the autumn.

One of the first domestic food blending businesses in China to be awarded a license to operate under new regulations put in place in 2010, Howbetter provides stabiliser systems and ingredient blends for customers across China, mainly in the dairy and beverage categories. 

The company operates from a blending facility in Suqian and has application laboratories in the nearby city of Xuzhou, both in Jiangsu Province. 

Olivier Rigaud, president of Tate & Lyle’s Speciality Food Ingredients arm said the joint-venture will merge his company’s experience in blending and recipes for global markets with Howbetter’s local knowledge and infrastructure: “It will provide us with an excellent platform on which to accelerate the growth of our food systems business in China​.”

Yitong’s chairman, Feng Guang, who also heads up Howbetter, will add general manager of the joint-venture to his portfolio of roles. 

Not so sweet for T&L Sugar

This is the second time this month that the name Tate & Lyle has hit the headlines in Asia after Tate & Lyle Sugars, a separate company owned by ASR Group, said it was considering legal action against The Guardian newspaper over a story that had accused the company of working with a Cambodian supplier that employed child labour, among other human rights abuses including evicting locals off their lands.

While the sugar major has strongly denied the story, citing inaccuracies in its reporting, an international group that promotes the ethical sourcing of sugar for the food and energy industries revealed this week that it had suspended Tate & Lyle’s membership.

London-based Bonsucro, whose members include global brands such as Coca-Cola and BP, announced the July 8 decision of its board to suspend Tate & Lyle on Tuesday evening.

[Tate & Lyle] has not, in the view of the board, demonstrated adequate progress within a reasonable timescale towards meeting the requirements of the board to provide information regarding a complaint made against the company, nor adequately explained why these requirements could not be met​,” it said in a statement.

The suspension will remain in place until Bonsucro is satisfied its resolution conditions are met by Tate & Lyle.

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