Tate and Lyle sugar division sold to US company
07 August 2010
After much speculation in the financial press, Tate & Lyle has sold its sugar division to the US firm American Sugar Refining (ASR) for £211 million. The sale includes the factories and refineries in the UK and Portugal, and ‘a perpetual worldwide licence to use the famous brand names’. Tate & Lyle is now to focus on its food ingredients business, with the revenues from the sale being used to reduce the company’s net debt (which stood at £814 million at the end of March 2010). This follows the sale to ASR of Tate & Lyle’s North American sugar interests in 2001, and its Canadian interests in 2007. Tate & Lyle also plans to sell its remaining sugar businesses (molasses and Vietnamese sugar).
ASR is a global sugar business with a total refining capacity of 6 million tonnes per year. It is based in New York, with facilities in Yonkers, New York; Baltimore, Maryland; Chalmette, Louisiana; Crockett, California; Toronto, Canada; and Veracruz, Mexico. ARS itself is owned jointly by Florida Crystals Corporation, which is part of the Fanjul Corporation and the Sugar Cane Growers’ Cooperative of Belle Glade, Florida: ‘Florida Crystals is the only producer of certified organic sugar grown and harvested in the United States.’
Editorial comment
From an ACP perspective, it should be noted that the Fanjul Corporation, via its subsidiary Central Romana Corporation, owns 240,000 acres of sugar cane land, a sugar mill, a refinery, and a deep sea port (among other assets) in the Dominican Republic. The corporate links of American Sugar Refining (ASR) could thus help overcome the supply difficulties which have undermined the profitability of the Tate & Lyle sugar refineries in recent years, by assisting in sourcing sufficient raw sugar cane to attain optimum efficiency in the utilisation of the invested capital. In addition, given the operational interest of the Fanjul Corporation in sugar production in the Dominican Republic, an interest could exist in investment in other Caribbean sugar-producing countries with a capacity for competitive sugar cane production (e.g. Guyana).
It is unclear what the impact of Tate & Lyle’s sugar division will have on the existing arrangements for the marketing of sugar from sugar projects in Laos and potentially Cambodia, initiated in cooperation with the Thai sugar group Mitr Phol.
http://agritrade.cta.int/