Tate & Lyle has announced a major realignment to focus on speciality food ingredients amid a significant restructuring of its Splenda sucralose business. 

The listed group has exited from the substantial part of its European bulk ingredients business and has signed an agreement with ADM to realign the Eaststarch joint venture. The equally-owned corn wet milling business operates in Slovakia, Bulgaria and Turkey, with a 50% equity share in the largest in Hungary.

Under the re-alignment Tate & Lyle will acquire full ownership of the speciality-focused plant in Slovakia, which it believes will strengthen its speciality food ingredients business. Its exit of the bulk ingredients plants in Bulgaria, Hungary and Turkey is expected to reduce its footprint and also earn it €240m (£172m) in cash on completion, expected to be this summer.

Meanwhile, it plans to restructure and refocus its Splenda sucralose business to “maximise returns”. All production of the product will be consolidated into the company’s Alabama facility in the US, meaning the Singapore factory will be closed next spring and the brand’s future cost base should be “materially lower”. The Splenda sucralose business is expected to break even in the year ending 31 March 2016, before returning to “modest profitability” a year later.

The overall plan is to position Splenda as “a more focused, low-cost and sustainable business”.

Javed Ahmed, chief executive, said: “By re-aligning the Eaststarch joint venture, we will focus in Europe on speciality food ingredients, and our bulk ingredients will become a predominantly North American business, with strong market positions and efficient, scale assets.

“We are re-structuring Splenda sucralose as a more sustainable business. Our broader speciality food ingredients business has an expanding global footprint and a steady flow of new products targeted at the higher growth health and wellness space, and is well-positioned for future growth.

“Overall, the actions announced today streamline and further focus Tate & Lyle as it continues to transition to a global speciality food ingredients business, supported by cash generation from bulk ingredients.”

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