Specialty Food Ingredients Help Tate & Lyle Achieve Strong Full-Year Profit
Specialty Food Ingredients sales were up 10% at £887 million ($1,358 million). Adjusted operating profit was up 8% to £348 million ($539 million).During the year the company opened a new global Commercial and Food Innovation Centre in Chicago which is aimed at helping Tate & Lyle transform the way they interact with customers, it is positioned as a key component of the foundations for long-term growth.
31 May 2012 --- Strong growth of sucralose sweetener Splenda and other specialty food ingredients helped boost Tate & Lyle's full-year profit 23 percent, as the British group identified a move by consumers toward specialty food ingredient based products.
Specialty Food Ingredients sales were up 10% at £887 million ($1,358 million). Adjusted operating profit was up 8% to £348 million ($539 million).
The London-based sweeteners and starches group reopened a second plant in March to meet demand for its zero calorie Splenda while high sugar prices benefited its competing bulk sweeteners and it gained from growth in emerging markets.
The company’s Chief Executive, Javed Ahmed, said the company performed well with steady growth across a number of markets, supported by exceptionally strong returns from co-products in the first half.
He claimed the company delivered profitable growth, whilst meeting organizational milestones: “In the current financial year we expect to make further progress as we build upon the investments we have made and continue to take the steps necessary to transform the business.”
During the year the company opened a new global Commercial and Food Innovation Centre in Chicago which is aimed at helping Tate & Lyle transform the way they interact with customers, it is positioned as a key component of the foundations for long-term growth.
They also restarted production at the Splenda Sucralose facility, to supplement Singapore production, reflecting growth in its value-added specialty products for the food and drinks industry, which make up nearly 60 percent of profit, as the former sugar refiner retreats from bulk sweeteners and starches.
Ahmed explained: “In Specialty Food Ingredients we expect to achieve good sales growth, although operating margins in this division are expected to be slightly lower reflecting the additional fixed costs associated with the restart of McIntosh.
“In Bulk Ingredients, we anticipate improved bulk sweetener margins in both Europe and the US to broadly offset our expectation of more normal co-product returns and the impact of softer market conditions in industrial starches in Europe and ethanol in the US.
“While the food industry remains relatively resilient, it is not immune to fluctuations in the wider economy and, during the second half, the deterioration in the macroeconomic environment in Europe led to weaker demand within some food ingredient categories.
“Against this backdrop, the global market for specialty food ingredients continues to benefit from a number of key trends: increasing focus by consumers and governments on healthier lifestyles, increasing customer focus on cost reduction and finally, continued rapid urbanization, coupled with rising levels of disposable income in developing markets, increasing the penetration of packaged and convenience foods particularly in Asia and Latin America.”
