Tate & Lyle to up sucralose output
production of the sweetener sucralose at its plant in the US to
meet increased demand for its Splenda brand.
Tate & Lyle became the sole manufacturer of Splenda earlier this year after reaching an agreement with its US partner McNeil Nutritionals. The British group is also responsible for the worldwide sales of Splenda to food and beverage manufacturers, while McNeil covers the retail and foodservice sales of the brand.
The expansion of the plant at McIntosh, Alabama, will cost some £16 million, and is expected to be completed in January 2006. Tate & Lyle said that the project would be funded from existing resources.
Iain Ferguson, chief executive of Tate & Lyle, said: "We have been delighted by the strong customer-led demand for Splenda sucralose since we completed the realignment in April this year. This growth is across all categories and includes the introduction of new mid-calorie carbonated beverages containing sucralose."
More than 3,500 products are now sweetened with sucralose, the company said.
The cost of the realignment of the sucralose business has already reached £74 million, the company said, and while pre-tax profits from the unit reached £17 million in 2003, this is likely to be reduced by a number of further costs.
"Growing the contribution from value added and consumer branded products is a key element of our strategy and the sucralose ingredients business will be a major contributor," the company said.
"Sucralose is an exciting growth opportunity, ideally placed to meet consumer demand for reduced calorie options in many categories including soft drinks, dairy and confectionery."
Growing the added value business should also help Tate & Lyle offset some of the vagaries experience at its other operations, such as the significantly higher raw material prices which particularly impacted Amylum, the group's European cereal sweetener and starch business, in the second half of 2003.
This, and other factors such as adverse currency exchange rates, left Tate & Lyle with a full-year sales performance which was virtually unchanged from the year before at £3.2 billion, although a good performance in the US (in local currency terms) allowed the company to lift pre-tax profits by nearly 20 per cent.