Supply chain disruption costs Tate & Lyle £40 million

Gurjit Degun
23 September 2014

Supply chain disruption for specialty food ingredients provider Tate & Lyle has meant it will incur costs of £40 million in the first half of its financial year.

The company estimated it will sustain further costs of £10 million in the second half of the year, even though its global supply chain is “progressively returning to normal”.

A trading statement from the company said: “Supply constraints arising from the prolonged and severe winter in the US caused operational difficulties in our US corn plants and led to us entering the financial year with much lower inventories than usual.”

The company also explained an increasingly competitive market for its Splenda Sucralose sweetener also impacted on profit. An extended shutdown of the Splenda Sucralose factory in Singapore during the first quarter of the year impacted the supply chain too.

Javed Ahmed, Tate & Lyle chief executive, added: “The group’s performance in the first half has been extremely disappointing as we have faced significant manufacturing and supply chain challenges, and intense competition in Splenda Sucralose.

“I have instigated an immediate review of our planning and supply chain processes, led by our chief financial officer, to ensure they fully reflect the needs of the business going forward. We remain firmly focused on taking the necessary actions to improve the group’s performance and to deliver on our strategy.”

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