LONDON — The Speciality Food Ingredients business of Tate & Lyle, P.L.C. returned to volume growth in the six-month period ended Sept. 30 as Splenda sucralose volume improved in the second quarter and a recent Brazilian transaction also boosted results.
Splenda sucralose volume in the quarter ended Sept. 30 was ahead of volume in the previous year’s second quarter, London-based Tate & Lyle said in a trading update issued Oct. 8. Tate & Lyle will report half-year results on Nov. 5.
“Sucralose, yes, a little bit ahead of expectations,” said Javed Ahmed, chief executive, in an Oct. 8 trading statement call. “Just for context, keep one thing in mind. Sucralose volumes in the first half were constrained by the shutdown we had to take in Singapore, if you recall.”
Tate & Lyle last December closed on a transaction that established a joint venture with Gemacom Tech Indústria e Comércio S.A. Tate & Lyle acquired a majority interest in Gemacom Tech, which provides stabilizer systems and ingredient blends for customers in Brazil and other South American countries. The joint venture now is known as Tate & Lyle Gemacom Tech.
Mr. Ahmed said the transaction was an entry vehicle into an emerging market.
“So longer term, I certainly see that business as being a key part of the overall food system,” he said.
The six-month performance of Tate & Lyle’s Bulk Ingredients business overall was below the performance in the same time period of the previous year. Low U.S. ethanol margins continued to impact commodities, which include ethanol and co-products. Sweetener demand was solid.
Demand in the carbonated soft drink category has been more stable than in the past, Mr. Ahmed said.
“The consumption data I’m looking at is more in the 1.6%, 1.7% decline as opposed to the 2.5% to 3% that we’ve seen previously,” he said. “Mexico is showing some demand pull.”Tate & Lyle also has obtained regulatory approval for the re-alignment of its Eaststarch joint venture in Europe and expects to complete the transaction in the third quarter. The results of the disposed elements of the Eaststarch joint venture will be reported within discontinued operations in the fiscal year ended March 31, 2016.