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 ed.ballard@wsj.com
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