Tate & Lyle adds value

By Rick Pendrous

- Last updated on GMT

Related tags Value added Sucralose Tate & lyle

Tate & Lyle plans to grow the added value side of its business to 60% over the next few years as its traditional sugar business is hit by reforms...

Tate & Lyle plans to grow the added value side of its business to 60% over the next few years as its traditional sugar business is hit by reforms to the European Union sugar regime, to be announced later this month.

In a move to refocus its investment in R&D to develop this side of its business, the company has recruited an additional 19 scientists and technicians this year. R&D increased by 12% to £19m in the year.

Over the next five years it also plans to spend up to £25m in its Tate & Lyle Ventures business, which will invest in start-ups and expansion-stage companies working on "next generation food and industrial ingredients"

The European Commission will be announcing its sugar reform proposals on June 22, although leaked reports have indicated cuts in sugar prices of as much as 40%. Whatever the actual figure that emerges, Tate & Lyle acknowledges it will have an adverse impact on the performance of its European Sugar and Food & Industrial Ingredients business.

Already, the company has announced plans to triple its sucralose production capacity to meet the success of its Splenda sweetener business. It also has a joint venture with Du Pont to produce a biopolymer ingredient called Bio-3G from corn at a plant in Tennessee in the US, which will come on stream in the financial year ending March 31, 2007.

"The growth in value added products, especially the strong performance of Splenda sucralose, and the improvement in the quality of our earnings together with our increased strategic focus enable us to view the future with confidence," said chairman Sir David Lees.

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