Tate & Lyle to Exit Europe Corn Syrup Operations, Restructure Specialty Ingredients

By Ed Ballard

LONDON--Tate & Lyle PLC (TATE.LN), a U.K. ingredients maker battered by a string of profit warnings, said Tuesday it will exit its European corn-syrup business and restructure its ailing specialty ingredients division.

The FTSE 100-listed company has issued three profit warnings since February 2014 as a glut of low-cost sweeteners produced in China eroded the profitability of its Splenda product, part of its specialty food ingredients division.

Tate will sell part of its bulk ingredients business, which sells low-margin products such as corn syrup. Archer Daniels Midland Co. (ADM) will pay Tate 240 million euros ($258 million) for Tate's 50% stake in the companies' EastStarch European corn milling joint venture.

The sale will reduce earnings but allow Tate to focus on reversing the fortunes of its specialty food ingredients business, Tate said. It will close a facility in Singapore to cut costs, consolidating production at a plant in McIntosh, Alabama.

"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," said Chief Executive Javed Ahmed.

In total, Tate will take a 185 million pounds charge ($276 million) from the restructuring. It said it remains committed to its dividend policy and will increase this year's payout by 1.4% to 28 pence.

Write to Ed Ballard at [e-mail]

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