Tate & Lyle buys South African ingredients business
South African ingredients market, buying up small ingredients
supplier Dolcre for €1.9 million.
The London-based firm said today it has bought the remaining 80 per cent stake in the South African company, building on the 20 per cent slice that it acquired in 1998.
"We were impressed by their approach to customer solutions," a spokesperson for the British sugar and starch group commented to FoodNavigator.com.
Tate & Lyle claims the new acquisition, with a portfolio that includes pectins, maltodextrins and fat replacers, fits in with its ongoing 'food ingredient solutions business' strategy, supplying packaged blends of ingredients for specific segments of the food industry.
The Dolcre purchase gives the UK firm, that already has a molasses unit in South Africa, an established ingredients business presence in the country. Dolcre, founded in 1996, will now begin a re-branding process to change its name to Tate & Lyle South Africa. The firm currently employs 27 people.
"Tate & Lyle and Dolcré enjoy a unique fit, sharing the same customer base and having played an important part in each other's business in South Africa for some time," said Stanley Musesengwa, Tate & Lyle's chief operating officer.
The UK firm, that posted €4.5 billion in sales last year, sold some sugar businesses in Zimbabwe and Zambia, and East African Storage around 2002, but since then has not recently sold any businesses in South Africa.
Dolcré is the sole distributor of Tate & Lyle's sucralose product Splenda. The sugar replacer, 600 times sweeter than sucrose, is currently enjoying a lift in demand. Sucralose is permitted in 40 countries, but has only recently been accepted onto the EU25 market through an amendment to the 1994 EU Sweeteners Directive (94/35/EC), cleared in February this year.
The market for the ingredient (E955) holds considerable potential as rising health concerns drive consumers towards sugar free products and food makers introduce zero-calorie or low-calorie sugar substitutes into their new product formulations.
Tate & Lyle became the sole manufacturer of Splenda earlier this year after reaching an agreement with McNeil Nutritionals whereby the British group is responsible for worldwide sales of the Splenda brand to food and beverage makers while McNeil targets retail (tabletop) and foodservice sales. The product is produced at one sole plant, slated for a £24 million face-lift, in Alabama, US.
