Tate & Lyle enters sugar joint venture in Italy
March 29, 2007
by Jeff Gelski
LONDON — Tate & Lyle, P.L.C. made two announcements relating to sugar on Thursday, one involving a joint venture in Italy and the other on treating Eastern Sugar as a discontinued business.
In the joint venture, Tate & Lyle and Eridania Sadam (Eridania) have formed Eridania Tate & Lyle, which will be exclusively responsible for the marketing and sales of all sugar products from the two parent companies into the Italian market.
Tate & Lyle will invest £2 million ($3.9 million) to hold 35% of the joint venture. Eridania, a beet sugar manufacturer in Italy, will hold the remaining 65%. Eridania recently surrendered 50% of its European Union sugar quota.
"We are committed to investing in the long-term success of our European sugar cane business," said Ian Bacon, chief executive, Sugars, Europe, for Tate & Lyle. "This joint venture is an important step in our strategy to develop new markets following the reform of European sugar regime."
Tate & Lyle said Eastern Sugar will be treated as a discontinued business in the financial results for the year ended March 31. The announcement follows the formal agreement of the renunciation of beet sugar quota by Eastern Sugar with the E.U. restructuring fund. Tate & Lyle’s share of net cash proceeds from the restructuring fund of about £51 million ($100 million) will be payable in two installments in the financial year to March 31, 2009.
Tate & Lyle plans to give preliminary results on May 23 for the year ended March 31.