Tate & Lyle woos Asia with R&D drive

Tate & Lyle's range of value-added ingredients include its Splenda Sucralose sweetener, texturants like gums and starch, and products intended to boost health and wellness, like Promitor fibres, proteins, and prebiotics.

The company has previously offered its range of value-added ingredients to food manufacturers - both multinational and Asian.

But with an R&D team that has a physical presence in the region, it says these customers will have better access to its range.

The team will be involved with developing prototypes of both Asian and Western-style foods and beverages, to show off how its ingredients work and how the products can be adapted to suit specific tastes.

To begin with, Tate & Lyle will be focusing on bakery, dairy and beverage applications.

A spokesperson for the company said analysis of the market situation has shown a number of developments in Asia, with an overall trend towards health and wellness.

"In China, we are seeing a strong impact of Western culture vs. the traditional Chinese culture and food.

The economic growth, especially in cities such as Shanghai and Beijing, leads to a faster-paced lifestyle and a greater role for convenience foods."

There is increased interest in functional/fortified products, especially in the beverage sector, with products like ready-to-drink tea, fruit and vegetable juice and bottled water figuring large, she added.

Of course, Asia covers a large area and there are significant differences within the region.

For instance, Tate & Lyle says that in India there is more interest in fibre and awareness of its digestive benefits; people prefer smaller pack sizes; and the beverage sector shows an increase in reduced sugar carbonated beverages.

In Japan, much innovation is happening in functional beverages.

"While the older population is generally more interested in traditional foods, younger people tend to consume more convenience foods," said the spokesperson.

"Consumers also show an increased awareness of the role diet plays for their health."

Mun Hay Tang, manager of technical service and applications said: "At the same time we will learn more about Asian consumer preferences and trends, and how our ingredients can help solve the challenges our customers face in this market."

Catering to the Asian consumer has become a major target for food manufacturers, as disposable income is on the rise.

Estimates from the International Monetary Fund put growth in consumer spending in Asia (including Japan, as well as emerging economies) at an average of 6.3 per cent a year in 2005 and 2006.

Tate & Lyle is not the first ingredients company looking to make it easier for manufacturers to tap this potential.

For instance, flavour and fragrance firm Symrise announced in August that it is effecting a big expansion of its regional Sensory and Consumer Science Center in Singapore.

Moreover, Tate & Lyle opened a new production plant for Splenda sucralose in Singapore in a bid to capitalise on the potential of Asia's sweetener demand.

The site, which is part of an S$300m (€145m) investment by Tate and Lyle, is expected to reach full capacity within 12 to 18 months to continue the group's global expansion plans.

At the same time, Tate & Lyle's new R&D centre in Lille, France, is scheduled to open its doors in the next few months.

There will be coordination between the centre in France and the centre in China.

"A ll our R&D facilities work together to exchange their applications expertise and thereby maximise the benefit for our customers," said the spokesperson.

It is also not clear how closely activities at the facility in Singapore will be linked to those in Singapore.

The company has been increasingly focusing on its value-added ingredients as it seeks to reduce reliance on its sugar activities, in the light of EU sugar reform.

In full year 2007 Tate & Lyle reported total sales from continuing operations of £4.07bn, and operating profit of £373m. "Growth this year has been driven substantially by our Food & Industrial Ingredients businesses, which together achieved a 36 per cent increase in adjusted operating profit," said chairman Sir David Lees.

In 2006 it had set an ambitious target for the contribution of value-added ingredients to overall operating profit to increase by 30 percent.

In the event, it did not achieve this, but profits from value-added products were 14 per cent higher than in 2006.

The company stood by its strategy to grow the value-added part of its business.