Tate & Lyle to Focus on Growth in Speciality Food Ingredients

03 Apr 2014 --- Global specialty food ingredients provider, Tate & Lyle, will focus on the areas of ‘green chemistry’ and fermentation in the future, as part of its strategy to offset a challenging market within its Bulk Ingredients division. The news comes as the company reports that it expects Group adjusted profit-before-tax for the year ended 31 March 2014 to be broadly in line with the comparative period.

As part of its interim results announcement, the company said a weak soft beverage season and bad weather in the US posed challenges for its Bulk Ingredients (BI) sector last year, but this was offset against strong growth in emerging markets within its Speciality Food Ingredients (SFI) division.

“Because Bulk Ingredients’ margins tend to be lower they do not lend themselves to being exported and so shipping BI products made in the US or EMEA to the emerging markets is not viable,” the spokesman told Food Ingredients First. “Therefore, what we are doing in BI is a couple of things. We are diverting corn grind out of making bulk ingredients into SFI given that the two divisions share manufacturing assets. We are also looking at opportunities within BI leveraging our fermentation expertise and assets in the area known as ‘green chemistry’, for example, we have helped Amyris scale up production of farnesene and Genomatica scale up manufacturing of BIO-BDO. This builds on the work we have done with DuPont through a joint venture to manufacture BIO-PDO.”

In Speciality Food Ingredients, the company continues to expect both volume and sales growth to be in line with the wider speciality food ingredients market, with strong volume growth in emerging markets and Europe partially offset by the US. As expected, operating profit growth in this division has been held back by the more competitive market for SPLENDA® Sucralose, the company said.

“Our strategy is to continue to invest in growing the SFI sector, while running BI for steady cash generation,” the spokesman told Food Ingredients First. “Our organic growth focus in SFI is on three main growth areas: innovation, emerging markets and new customer channels. We are also very focused on enhancing customer collaboration.”

Within Bulk Ingredients, Tate & Lyle continues to expect operating profit for the full year to be lower than the comparative period as a result of the soft beverage season in the US, which reduced demand for liquid corn sweeteners, and lower returns from co-products. The protracted severe cold weather in the US has also held back the performance of this division somewhat in the final quarter, despite the actions taken by our manufacturing and supply chain teams who succeeded in partially mitigating the full impact of this on our operations, the statement said.

By Sonya Hook