Tate & Lyle could net £70m from sale of Vietnam Sugars and molasses trading arm
![Javed Ahmed](/var/wrbm_gb_food_pharma/storage/images/_aliases/wrbm_small/publications/food-beverage-nutrition/foodmanufacture.co.uk/article/2010/07/13/tate-lyle-could-net-70m-from-sale-of-vietnam-sugars-and-molasses-trading-arm/429783-2-eng-GB/Tate-Lyle-could-net-70m-from-sale-of-Vietnam-Sugars-and-molasses-trading-arm.png)
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.