Tate & Lyle could net £70m from sale of Vietnam Sugars and molasses trading arm

By Elaine Watson

- Last updated on GMT

Related tags: Sugar, Sugar beet, Tate & lyle

Javed Ahmed
Javed Ahmed
Tate & Lyle could net a further £70m from selling its molasses trading and Vietnam sugar businesses following the £211m sale of its EU sugar division, according to Investec Securities.

In a note on Tate & Lyle’s prospects following the sale, Investec analyst Martin Deboo said: “The sugars disposal is accretive to pre-tax return on capital by about two percentage points and earnings quality has decisively improved in our view.”

“There is also the promise of a nice-to-have exit from molasses trading and Vietnam sugars, which we think could net a further £70m.”

The sale of the EU sugars division had been a “sweet deal for Tate & Lyle​”, he added. “A break even business with a challenged model ​has been exited for £211m. Any doubts that​ [chief executive] Javed Ahmed​ [pictured] might be long on management speak and short on action have also been dispelled."

Molasses, which is widely used in animal feed, is a sweet liquid produced by the sugar-refining process. It is also used as a substrate for fermentation in the food and drink industry.

Tate & Lyle sources cane and beet molasses from more than 40 countries, trading more than 2m tonnes a year.

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