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Tate and Lyle expands Chinese presence

By Neil Merrett , 27-Apr-2007

Tate and Lyle today launched a new production plant in Singapore that will allow it to ramp up production of its Splenda sweetener in the region.

The site, which is part of an S$300m (€145m) investment by Tate and Lyle, is expected to reach full capacity within 12 to 18 months to continue the group's global expansion plans. The investment, currently Tate and Lyle's largest in Asia, comes as ongoing reforms of the European sugar market continue to hit the industry. This highlights the increasing importance of markets in Asia to offset declining European revenues.

Speaking at the plant's opening, company chief executive Iain Ferguson welcomed the expansion as an important step in capitalising on the potential of Asia's sweetener demand. "By building this facility we will broaden our manufacturing base and we look forward to building our business in the Asia Pacific region," he said.

Splenda sucralose is a no-calorie sweetener derived from sugar and has become increasingly significant to the group's operations. Though accounting for just 4 per cent of Tate and Lyle's total sales during the first six months of the financial year, Splenda represented 17 per cent of operating profit over the period, according to figures supplied by the company.

To drive this profitability further, Tate & Lyle has scoured the region for what it says is the technical staff to meet the challenges of operating in Asia. "We have recruited a team of some of Singapore's finest scientists, engineers and technicians, many of whom have spent several months working at our Splenda sucralose facility in the United States," said Ferguson.

The group will be keen to leverage markets like China to help turnaround a difficult operating climate for sugar and ingredients groups. Tate & Lyle had a challenging year during 2006, but not as tough as 2005 when profits fell 79 per cent to €62m.

Changes to the EU sugar regime hit the firm hard, and Tate & Lyle has since been working hard to develop a global strategy to offset the revenue hit it took in Europe.

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