UK-based ingredients and sugar company Tate & Lyle has sold Redpath, Canada’s largest sugar cane refinery. The move, the company told just-food, is part of a strategy to increase its focus on value added products in Canada, but not the rest of the world.
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“The announcement just concerns Canada. Factors behind the sale are twofold: firstly, it will allow us to increase our focus on a value added strategy and, secondly, it will reduce earnings volatility,” Fern Hudson, Tate & Lyle spokesperson commented.
Tate & Lyle said that its Canadian sugar business operates on the world market, meaning that it is subject to adjustments which can cause price volatility.
Tate & Lyle was keen to emphasise that the sale did not represent a move away from its sugar processing businesses in other markets, particularly Europe.
“We have always said our cane refineries in Europe offer a sustainable model. Recent investments in upgrading European facilities… demonstrate our commitment to our sugar business in Europe,” Hudson told just-food.
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By GlobalDataThe Toronto-based refinery, which produces sugar under the Redpath trademark, has been purchased by American Sugar Refining, widely known as Domino. Domino markets its products under the Domino and C&H brands, operating sugar refineries in Yonkers, New York; Baltimore, Maryland; Chalmette, Louisiana; and Crockett, California.
In the year to 31 March 2006, Redpath had total sales of GBP177m (US$346.19m) and profits before interest and exceptional items of GBP18m. As of 30 September, Redpath had gross assets of GBP110m and net operating assets of GBP84m.
Upon completion, Tate & Lyle will receive a net consideration of GBP132m, subject to closing adjustments relating to working capital. The cash, Tate & Lyle said, will be used to reduce group debt.
