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Sweet life in US is looking increasing sour for Tate & Lyle as sugar prices fall.

Sugar and sweetener maker Tate & Lyle yesterday warned that tough trading in the US market was continuing to sour its business and said it would consider pulling out altogether.

The group warned last November that the slump in US sugar prices would make trading tough.

Unveiling full-year results, the group's chief executive, Mr Larry Pillard, said: 'Frankly, it's been tougher that we anticipated at that time.'

He added that sugar prices were running at 15-year to 20-year lows.

The company is in the midst of a complete review of its US business, which Mr Pillard said was aimed at reaping value for shareholders from its under-performing US assets.

'If that means exiting the business that is what we will do,' he said.

But he added that the group could take the opposite view and decide to lead a rationalisation of the over-capacity in US sugar production.

'At the other extreme, we may be leaders in the consolidation of that industry,' Mr Pillard said.

The continuing tough outlook in the US came as Tate & Lyle announced it was taking over full ownership of two starch and sweetener businesses, signalling a closer concentration on the group's more profitable lines of its business.

Tate & Lyle is buying up the minority stakes it does not already own in Amylum, a cereal sweetener and starches business in Europe, and in Staley, a US corn starch business.

The company is paying pounds 274 million for the stakes from French group CIP.

At the same time the company is selling Bundaberg, its Australian sugar-cane milling business, for pounds 162 million.

Tate & Lyle's profit before tax for the year to March 25 was pounds 191 million, up from pounds 184 million last year and shareholders will receive a dividend of 21.4p, up from 17.2p.

Sales were down to pounds 4.1 billion from pounds 4.36 billion.
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Publication:The Birmingham Post (England)
Date:Jun 9, 2000
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