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Tate & Lyle sells molasses business as speciality focus continues

Tate & Lyle has announced the sale of its molasses business to international commodity trader W&R Barnett for £67m, as it continues to shift its focus to speciality food ingredients and reduce net debt.

The firm said in a statement released today that the sale – due to be completed within the next few weeks – included its global molasses trading desk in London, related worldwide marketing operations and UK third-party storage operations.

Graham Jones, director of equity research, Panmure Gordon, said the disposal came as no surprise, and that 2009/10 sales of £228m and operating profits of £13m for the molasses business were, “broadly in line with our expectations”.

Tate & Lyle’s sale of its remaining Vietnamese sugar business is also “progressing to plan”, and Jones suggested that high prices for EU raw cane imports meant the firm was likely to achieve a good price for the business.

Molasses is widely used in animal feed, and is a sweet liquid produced by refining sugar. It is also used as a substrate for fermentation in the food and drink industry.

Tate & Lyle currently sources cane and beet molasses from more than 40 countries, and trades more than 2m tonnes a year.

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