Tate & Lyle exits European venture and shuts sucralose plant

By Caroline SCOTT-THOMAS contact

- Last updated on GMT

Tate & Lyle said the restructuring would make its Splenda sucralose business more sustainable
Tate & Lyle said the restructuring would make its Splenda sucralose business more sustainable

Related tags: Splenda, Sucralose, Lyle

Tate & Lyle has announced a restructuring that will see it make changes to its struggling Splenda sucralose business and exit most of its European Bulk Ingredients business.

To deal with a sharp fall in profits from its sucralose business, the company said it would move all sucralose production to its Alabama plant and close its Singapore facility by spring 2016, incurring one-off net costs of about £125m (€174m). It said this should mean its sucralose business would break even within the next financial year and return to profitability by March 2017.

It also said it would exit the bulk ingredients facilities it owns with Archer Daniels Midland in Bulgaria, Turkey and Hungary, and acquire full ownership of a more specialty-focused plant in Slovakia that it also co-owned with ADM. The company said it would appoint ADM as exclusive agent for bulk ingredients produced from the plant, as well as from its wholly-owned corn wet mill in The Netherlands.

Tate & Lyle will receive €240m on completion of the deal.

Company CEO Javed Ahmed said in a statement that the restructuring would make the Splenda sucralose business more sustainable, and added: “Overall, the actions announced today streamline and further focus Tate & Lyle as it continues to transition to a global Speciality Food Ingredients business supported by cash generation from Bulk Ingredients.”

The company added that it would continue to supply European customers with crystalline fructose by being appointed as distributor for the ingredient produced from the plant it co-owned in Turkey under a long-term agreement.

The UK-headquartered ingredients firm had previously issued three profit warnings in a year, with the latest in February 2015, as competition from sucralose suppliers in China had undercut its prices, and the company struggled with falling oil and sugar prices.

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