Sucralose sales increase fails to meet expectations

by Jeff Gelski
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LONDON — Sales and profits of Splenda sucralose for the year ended March 31 likely will exceed the prior year by a modest margin and not meet company expectations since uptake from major customers has been slower than expected, Iain Ferguson, chief executive officer for Tate & Lyle, P.L.C., said in a conference call Jan. 23.

"I must emphasize that what we’re talking about here is the time taken to reformulate and launch new products, and should be seen in this context," he said. "The reformulation of our major customers’ products to include Splenda sucralose is taking longer than expected and, therefore, the anticipated growth in this product has not yet been achieved.

"In particular, volumes to the U.S. carbonated soft drink sector have not met our expectations this year, and additional resources have been deployed to address this."

London-based Tate & Lyle will focus more resources on the research and development side, where the company is working with customers, and also on the consumer research side, Mr. Ferguson said.

Because sucralose contributions will be lower than expected, the growth of value-added profits will be significantly below the target of 30% set by Tate & Lyle for the year ended March 31, Mr. Ferguson said.

Tate & Lyle expected a significant sucralose sales increase once an expansion at its plant in McIntosh, Ala., made it possible to double the sucralose capacity there. Tate & Lyle will start to commission another sucralose plant in Singapore in April, Mr. Ferguson said. It will take 12 to 18 months to build up to full capacity at the Singapore plant, he said. Tate & Lyle will concentrate on building inventory of sucralose, a high-intensity sweetener.

"We’ve had very low inventories, historically, and that has been one of the difficulties in terms of building major launches with some of our customers, but we now are in position where we can build inventory," Mr. Ferguson said.

Tate & Lyle has made no substantial changes in price to its customers, he said.

"But going forward as we now have volume available, obviously we will be looking at the volume price equation," Mr. Ferguson said.

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