Speciality focus for Tate & Lyle
Tate & Lyle PLC has announced its exit from the substantial part of its European bulk ingredients business and the restructuring of its sucralose business to further focus on and strengthen speciality food ingredients.
Key highlights are:
1. Re-alignment of Eaststarch European joint venture – Tate & Lyle signs an agreement with ADM to re-align its Eaststarch corn wet milling joint venture in Europe. Under the re-alignment, Tate & Lyle will:
‒ strengthen its speciality food ingredients business by acquiring full ownership of the more speciality-focused plant in Slovakia
‒ substantially reduce its European bulk ingredients footprint by exiting the predominantly bulk ingredients plants in Bulgaria, Turkey and Hungary
‒ receive €240m in cash on completion of the transaction.
As a result of the re-alignment:
‒ Tate & Lyle will substantially exit from bulk sweeteners in Europe for good value and before a decision on potential future capital investment is required arising from the reform of the EU Sugar Regime in 2017
‒ proportion of group adjusted operating profit from speciality food ingredients will increase from 50 per cent to around 55 per cent, and in Europe will effectively become all of the profit.
2. Re-focus and re-structure Splenda Sucralose to maximise returns.
3. Overall financial impact of Eaststarch re-alignment and sucralose re-structuring.
Javed Ahmed, chief executive, Tate & Lyle says: “By re-aligning the Eaststarch joint venture we will focus in Europe on speciality food ingredients, and our bulk ingredients will become a predominantly North American business with strong market positions and efficient, scale assets.
“We are re-structuring Splenda Sucralose as a more sustainable business. Our broader speciality food ingredients business has an expanding global footprint and a steady flow of new products targeted at the higher growth health and wellness space, and is well-positioned for future growth.
“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.”
