Tate & Lyle to Exit Astaxanthin Business
Subject to employee consultation, it is planned that Astaxanthin production will cease at the end of September 2007. Tate & Lyle’s share of the operating loss of Astaxanthin for the year to 31 March 2007 was £3 million.
16/08/07 Tate & Lyle has announced that Astaxanthin Partners Ltd., its joint venture with Igene Biotechnology Inc., intends to cease production of Astaxanthin at the Tate & Lyle site in Selby, North Yorkshire. Additionally, Tate & Lyle is in discussions with its joint venture partner concerning Tate & Lyle’s exit from this loss making business.
Consultation with employees has now begun and will last 30 days. Closure would affect 45 jobs at the Selby site. Subject to employee consultation, it is planned that Astaxanthin production will cease at the end of September 2007. Tate & Lyle’s share of the operating loss of Astaxanthin for the year to 31 March 2007 was £3 million. Tate & Lyle’s share of cash closure costs are estimated at £3 million. An impairment charge on Tate & Lyle’s investment in Astaxanthin Partners Ltd was taken in the financial year to 31 March 2007.
Stanley Musesengwa, Chief Operating Officer, said: “The difficult decision to begin the consultation process follows a full review of the business and its profitability for the foreseeable future. This decision is not a reflection of the hardworking employees we have at the site and every effort was made to secure the future of the plant. The business has faced pressures due to escalating raw material prices resulting from changes in the EU Sugar Regime and higher energy costs. Unfortunately an increasing cost base coupled with a falling selling price means that production of Astaxanthin at the Selby site is no longer commercially viable.”
Tate & Lyle said it will help those colleagues potentially affected to seek suitable alternative employment. This will include the provision of on-site job shop facilities staffed by independent professional counsellors.
