Tate & Lyle Sees Full Year Progress After Sound Quarter

22nd Jul 2010 07:15

By Michael Carolan Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Food-ingredients producer Tate & Lyle PLC (TATE.LN) said Thursday it expects to make progress in the current financial year after a sound start to the year's trading. The company said that the steady demand for its speciality food ingredients seen in the first quarter of the year would continue. Sales volumes for artificial sweetener sucralose grew solidly in the first quarter, it added. The company's new Chief Executive Javed Ahmed embarked on a strategy earlier this year to focus investment on its speciality food ingredients at the expense of its low-growth bulk ingredients and sugars businesses. Within the bulk ingredients business, corn sweetener volumes were higher on the year in the first quarter due to firm demand for high fructose corn syrup in Mexico and increased European capacity. It expects this firm demand in Mexico to continue, though U.S. demand will decline. "Despite some improvement in demand, industrial starch margins are expected to remain at lower levels, reflecting industry overcapacity, and we continue to see little near term improvement in U.S. ethanol markets." "Overall, we continue to anticipate progress in the current full financial year," the company said. Earlier this month, Tate & Lyle announced the sale of its sugar refining operations in Europe to American Sugar Refining Inc. for GBP211 million and said it had taken initial steps for the sale of its molasses and Vietnamese sugar businesses. The value-added starch business and the group's artificial sweetener Sucralose will make up the bulk of the speciality business. These currently account for around 66% of the group's profit. Investments in the speciality business will be funded from the company's remaining bulk ingredients business--which is predominantly high fructose corn syrup and ethanol. Tate & Lyle has struggled for years to move away from commodity-based products towards a more value-added position but with little success. Ahmed took the helm of the group in October and has so far impressed the market. The company's shares have risen more than 50% in the last year and closed Wednesday at 468 pence. -By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; [email protected] (END) Dow Jones Newswires July 22, 2010 02:15 ET (06:15 GMT)