Tate & Lyle is the global market leader in sucralose, with plants in Singapore and the US, but competition from China has intensified in the past 18 months or so, driving prices down. The company’s price increase was effective from March 1.
Executive vice president of corporate affairs, Chris March, told FoodNavigator: “We adjust the prices on our ingredients from time to time and it’s a normal part of our business procedure.
“We are doing it in response to deteriorating market conditions, and prices have fallen in the preceding period.”
Speaking with investors in the company’s second quarter earnings call back in November, CEO Javed Ahmed said he was struggling to see “how we or frankly anyone else can make any money” at some of the sucralose prices seen on the market. He said sucralose was still profitable for Tate & Lyle, but it only represented about 10% of its Specialty Food Ingredients profits and was no longer the main driver of the division’s profitability.
Marsh said he did not want to comment on the company’s profit margins for sucralose, and added: “What we are trying to do is get appropriately paid for our safely manufactured, high quality product.”
Tate & Lyle issued its third profit warning in a year in early February, which triggered a steep decline in the company’s share price, hitting a low of 558 pence. Its shares have since rebounded 10.2% to 615 pence by this Monday afternoon.
The company said in February that it expected profits to be modestly below the £230m-£245m (€309m-€330m) range it predicted in September – itself a downward revision of an earlier full year profit forecast of £322m (€433m).