LONDON, July 22 (Reuters) – British sweetener and starches maker Tate & Lyle Plc (TATE.L) said it had made a sound start to the year and repeated a prediction it would make progress this year amid continued steady demand for specialty ingredients.
“In our Speciality Food Ingredients division, demand patterns for speciality sweeteners and starches have remained steady,” the company said in a trading update on Thursday. “We have also continued to experience solid growth in sucralose sales volumes.”
The group, which makes sucralose sweetener Splenda, was giving an update on its first-quarter (April-June) trading ahead of its annual general meeting later on Thursday.
At its bulk ingredients division, Tate & Lyle said corn sweetener volumes were somewhat higher year-on-year in the three months to the end of June, reflecting firm demand for corn syrup in Mexico and increased European capacity.
Industrial starch in both the Americas and Europe was described as “marginally lower”, with weaker margins partially offset by higher volumes. Ethanol margins improved slightly, although markets have remained depressed, the company said.
“In Speciality Food Ingredients, we expect a continuation of the steady demand patterns experienced during the first quarter,” Tate & Lyle said. “In Bulk Ingredients, we expect the firm demand for corn sweeteners into Mexico to continue alongside the modest decline in U.S. domestic demand, and stable demand in our other food markets.”
Industrial starch margins were expected to remain at lower levels, reflecting industry overcapacity, and the company said it did not see any near term improvement in U.S. ethanol markets.
“Overall, we continue to anticipate progress in the current full financial year,” it added.
Earlier this month on July 1, the group agreed to sell its European sugar operations to privately-owned American Sugar Refining for 211 million pounds, breaking a 150-link to sugar in favour of faster-growing sweeteners and starches.
“The book loss on disposal, before costs, is anticipated to be approximately 55 million pounds, subject to exchange rate movements and the timing of completion,” the company said on Thursday.
It hopes to sell its remaining sugar business in Vietnam and its molasses unit in Britain by the end of 2010.
The company said that a net debt of 787 million pounds at 30 June 2010 was down from 814 million at 31 March 2010. (Reporting by Paul Hoskins; editing by Matthew Scuffham)