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Contents
Executive Summary..................................................................................... 2
2.0 Situation Analysis.................................................................................. 3
2.1 Company Analysis.............................................................................. 3
2.1.1 Tate & Lyle Company...................................................................3
2.1.2 Tate & Lyle Markets and Structure...............................................3
2.1.3 Tate & Lyle Business Strategy......................................................3
2.1.4 Tate & Lyle Operations.................................................................4
3.0 SWOT Analysis....................................................................................... 4
3.1 Strength............................................................................................. 5
3.1.1 The market for value added........................................................5
3.1.2 Research and Development (R&D)..............................................5
3.2 Weaknesses....................................................................................... 6
3.3 Opportunities..................................................................................... 6
3.4 Threat................................................................................................ 6
3.4.1 Top Competitors for Tate & Lyle:..................................................6
4.0 Strategy Analysis................................................................................... 7
5.0 Strategies Capabilities of Tate & Lyle...................................................10
6.0 Industry Analysis (Porters Five Forces)...............................................11
6.1 Rivalry among existed firm..............................................................11
6.2 Threat of new entrants.....................................................................12
6.3 Threats of substitute products.........................................................13
6.4 Bargaining power of buyers.............................................................13
6.5 Bargaining power of suppliers..........................................................14
7.0 Tate & Lyle Environmental (PEST) Factors............................................14
7.1 Political Factors................................................................................ 14
7.1.1 Business Code of Conduct.........................................................14
7.2 Economy Factor...............................................................................16
7.2.1 Summary of Tate & Lyle Performance........................................16
7.3 Social Factors...................................................................................20
7.3.1 Corporate Social Responsibilities...............................................20
7.4 Technology Factors...........................................................................22
7.4.1 How Tate & Lyle adding value....................................................22

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7.4.2 How Tate & Lyle creating volume...............................................25

Executive Summary

Tate & Lyle is committed to conducting its business in a manner that

is sensitive to the environmental needs of the communities in which it
operates. They comes with several approach in order to fulfil the
requirements that include and can be achieved as a minimum, compliance
with

all

applicable

environmental

laws

and

regulations

and

implementation of responsible standards where laws or regulations do not

exist. Besides that, Tate & Lyle take seriously by making continuous efforts
to prevent pollution and improve environmental performance throughout
all its activities. In order to become a successful company, they able to
seeking and to minimize the use of energy, materials and natural
resources where possible, developing renewable sources for the energy
and materials used by our processes.
In Tate & Lyle it is important to assessing the environmental risks
associated with existing and new activities or when decommissioning
facilities, and establishing controls to ensure that the risks remain at an
acceptable level. The achievement that can be proud of Tate & Lyle
Company is by developing renewable products for our customers for
instance Bio-ethanol and Bio-PDO to help them reduce their impact on the
natural environment. Tate & Lyle encouraging concern and respect for the
environment,

emphasizing

every

employee's

responsibility

for

environmental performance through providing appropriate operating

procedures and training.

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2.0 Situation Analysis

2.1 Company Analysis
2.1.1 Tate & Lyle Company
Tate & Lyle was founded in the United Kingdom (UK) in 1921 but its
roots can be traced back to a number of companies established in the
middle of the 19th century focused on sugars in Europe, and corn milling
in the USA and Europe. Tate & Lyle is headquartered in the UK and
operates more than 45 production facilities around the world. Tate & Lyle
PLC is a public limited company listed on the London Stock Exchange and
registered in England. At March 2010, Tate & Lyle employed 5,666 people
across the Group.
Tate & Lyle is a global provider of distinctive, high quality ingredients
and solutions to the food, beverage and other industries. Through them
large-scale of efficient manufacturing plants, they turn raw materials into
distinctive and high quality ingredients for them customers. Tate & Lyle
ingredients and solutions add taste, texture, nutrition and increased
functionality to products that millions of people around the world use or
consume every day.
2.1.2 Tate & Lyle Markets and Structure

Tate & Lyle provide customers in four market which is food and
beverage, industrial, animal feed and pharmaceutical and personal care
with quality services and ingredients. Tate & Lyle operates through two
global business units which are in Specialty Food Ingredients and Bulk

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Ingredients. These two business units are supported by globalised support

services and Tate & Lyle Innovation and Commercial Development group.
2.1.3 Tate & Lyle Business Strategy
Tate & Lyle strategy is to deliver sustainable long-term growth and
returns for them shareholders. This strategy will go through disciplined
focus on growing them specialist food ingredients business like deeper
customer understanding, continuous innovation and agility and stronger
positions in high- growth markets. In addition, the strategy to fuel the
growth also will do through driving bulk ingredients and sugars business
for sustained cash generation.
2.1.4 Tate & Lyle Operations

Tate & Lyle operates a network of corn wet mills in both North
America and Europe, processing two types of corn that called dent and
waxy. Dent corn is the most common crop end is used to make high
fructose corn syrup, basic food and industrial starches, alcohol and animal
feed meanwhile waxy corn is contracted direct from the farmer and has
special functionality that makes it ideal for creating stabilizers, thickeners
and emulsifiers for the food industry. It is also used in adhesives and gums
for the paper industry. Tate & Lyle sugars business processes and refines
cane sugar, a tropical crop grown in areas of high sunshine and rainfall.
The results, cane sugar accounts for around 80% of world sugar
production.
Tate & Lyle have over 250 people in R&D team worldwide working to
develop innovative ingredients from renewable resources. Tate & Lyle
have R&D laboratories in Decatur, Illinois and Lille, France, but they also
have application laboratories in countries such as France, China, Germany,
Italy and Australia which are combined with them sales offices. Tate & Lyle
also develop partnerships with the external research community in order
to give the fresh ideas and insights into the markets.

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3.0 SWOT Analysis

Tate & Lyle (T&L) is a leading manufacturer of renewable food and
industrial ingredients. The Tate & Lyle annual report indicates that there
has some real strength that can build on. The company has cost efficient,
well invested manufacturing footprint, and deep technical process.

3.1 Strength
3.1.1 The market for value added
Overall, value added food ingredients remained steady throughout
2010 financial year, although the focus of consumers on health and
wellness trend and facilities continue to drive growth in these areas. Value
added ingredients sales increased by 4% to 546 million. Operating profits
increased by 22% to 101 million. There was continued to experiences
good growth in sales volumes of wellness ingredients. Within primary food
markets, they expect domestic demand for corn sweeteners to continue
its long-term trend of gradual decline. Whilst we have seen a degree of
improvement

in

demand

for

industrial

starches

from

the

levels

experienced during the second half of the 2009 financial year. The level of
net corn cost will be a key factor in determining performance in the
coming financial year.
3.1.2 Research and Development (R&D)

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The Tate & Lyle Company has a strong focus on research and
development (R&D) for introducing innovative products and technologies
in the market. Scientists have developed food ingredients and industrial
from renewable resources. Marketing and regulatory teams work together
to provide consumer research, support on labeling requirements, and
assistance on meeting product claims. Tate & Lyle company use of market
research to understand the consumer, the markets operate in and
customers needs. . By continuing to invest in R&D, the group is able to
come up with innovative a product which is add value and act as key
differentiators. In additional, the specialist knowledge supplements
existing in-house R&D capability. This business act as an R&D team for
small- to medium-sized customers and build close working relationships is
a reliable trusted partners in development.

3.2 Weaknesses

The Tate & Lyle company indicates that the primary sales decreased
by 4% from 2,584 million to 2,476 million. This decline was due to lower
co-product income, lower industrial sales volume in both American and
Europe and reduced selling prices of sugar and isoglucose in Europe,
reflecting the institutional price cuts implemented. The overall adjusted
operating profit was in line with prior year was decreased by 7% in
constant currency at 298 million. The food and industrial ingredients of
American were decreased of 178 million, 2% below the prior year.
Furthermore, low sales will be affected low return at the end. Weak return
on resources will be reflecting the managements inability to deploy its
asset in profitable avenues, and this could reduce investor confidence.

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3.3 Opportunities
A relatively small market for Tate & Lyle, pharmaceutical and
personal care is now they expect will grow in the future although
remaining relatively modest. At the moment, they sell two value added
ingredients into this market which is Zemea TM which is cosmetics and
creams, through joint venture DuPont Tate & Lyle BioProducts; and
SPLENDA Sucrlose that used in oral care products and to sweeten
medicines without adding calories.
3.4 Threat
The bulk starch market, where our food and industrial ingredients
business to compete, is concentrated in a relatively small number of large
players who operate in many different fields, including food, beverages,
paper and pharmaceuticals. Tate & Lyle Company main competitors in the
USA for corn wet milling and starch-based products are Archer Daniels
Midland Company (ADM), Corn Products International and Cargill. National
Starch is also a competitor, particularly in relation to some higher-value
modified food and industrial starches.
3.4.1 Top Competitors for Tate & Lyle:

Archer Daniels Midland Company, Cargill Foods, Corn Products

International, Danisco, Kerry Group plc, Penford Corporation, Sudzucker
Group and Tereos S.A.
4.0 Strategy Analysis
Tate & Lyle delivered a solid performance in the face of challenging
conditions in number of them markets. Adjusted operation profit from core
value added food ingredients grew strongly increasing by 22% (14% in
constant currency) to 131 million. Profit within primary ingredients in the
Americas and Europe wore 22% below the prior year at 98 million (27%

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in constant currency), as lower co-product income and weaker industrial

profits adversely impacted results.
With regard to Tate & Lyle plant in Fort Dodge, Lowa, in the last few
months them have conducted detailed analysis of the end markets which
the plant would supply under they new capital management process. The
continuing depressed and volatile outlook for ethanol, and uncertain
conditions in industrial starch and corn gluten feed markets, do not
provide any basic to complete and commission the plant.
Changes

in

feed

and

energy

markets

together

with

the

reconfiguration of technology required following Tate & Lyle experience of

installing new equipment at them Loudon plant, along with remobilization
costs, would mean that, if them were to complete Fort Dodge; total
additional costs would now be in the region of 70 million.
At the beginning of the year, recognizing the need to act decisively
and quickly in the face of the global economic downturn, them set out
they three near- term financial priorities for the business: to optimist
working capital; implement tight capital expenditure control; and reduce
they cost base.
Working capital reductions generated 79 million represented 68%
of depreciation, in line with the commitment stated at the beginning of
the financial year to hold expenditure below the annual depreciation
charge. Underlying costs reduced by 30 million in the year compared to
the comparative period including the cost savings achieved from
rationalizing the sucralose manufacturing footprint, with reductions
achieved through our focus on all areas of the cost base.
In future, Tate & Lyle purpose will be to grow them specialty food
ingredients

business.

They

will

do

it

through

deeper

customer

understanding, continuous innovation and agility, and through building

stronger positions in high-growth markets. They also will continue to drive

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sustained

cash

generation

DATE OF SUBMISSION:

from

the

bulk

ingredients

and

sugars

businesses to fuel this growth.

From 1 June 2010 Tate & Lyle will reorganize and operate through
three global business unit: Specialty food ingredients, bulk ingredients and
sugars. Each business unit will have a distinct go-to-market organization
to provide the necessary focus and bring the required expertise to the
different

markets

them

serve,

and

each

will

have

dedicated

manufacturing asset base.

Ongoing reviews performed regularly by the Group Executive
Committee, as well as peer reviews, have been added to sharpen the
investment appraisal process. Tate & Lyle will also create a dedicated,
internal resource, independent of the operations, with responsibility for
oversight of all capital expenditure.
Tate & Lyle have already made huge strides in the way they control
working capital in them business, evident from the improvement delivered
in the 2010 financial year. There is a much clearer appreciation within the
organization now of the need for working capital optimization and this is
something that Tate & Lyle intend to build on. To this end, they have
implemented standard measures of working capital efficiency. In the 2011
financial year, these targets will, for the first time, be linked to
management incentive structures.
Tate & Lyle three business units will be supported by global support
services, using shared service centres to eliminate duplication and
rationalize resources required. This will also allow them to redeploy some
needed resources to the front end of the business. Tate & Lyle have
already started work to strengthen operation enablers, by establishing a
common set of performance metrics across the business and they will
move to a single global IS/IT platform to drive improved global decision
making over the next two years. It will take time but the steps will lay the
foundation to deliver significant improvements in operational execution
over the coming months and years.

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Exceptional costs of 8 million associated with the reorganization

and restructuring of the group activities are expected to be recognized in
the 2011 financial year, with further exceptional costs expected to be in
the region of 13 million the following year. These cash costs are expected
subsequently to pay back within two years. Additionally, they are
developing a detailed implementation plan for a common, global IS/IT
platform, which they anticipate will be implemented over the next 24
months.
Tate & Lyle investment focus will be realigned to them strategy: Tate
& Lyle engine of growth and the focus of acquisitions will be specialty food
ingredients, with greater emphasis on emerging markets. Tate & Lyle bulk
ingredients and sugars businesses remain strong and valued business,
and we will continue to invest appropriately in order to increase their
efficiency and generate cash.
A new unit, the Innovation and Commercial Development Group, will
be established, dedicated to driving sustained long-term growth, with a
key focus on specialty food ingredients. This unit will integrate R&D,
global marketing and global product management, and will enable a fully
integrated approach to developing and commercializing innovation. Tate &
Lyle expect to achieve growth both in the existing markets, through the
benefits of the new operating modal and investment focus, and also in
emerging markets and in the small-and medium-sized enterprise (SME)
and private label customer segments, where they have limited presence
today. Tate & Lyle new operating structure will provide a clean platform
from

which

acquisitions

to grow

the business, both organically and through

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5.0 Strategies Capabilities of Tate & Lyle

Strategies Capabilities of Tate & Lyle have been divided into cost leadership and
differentiation. For cost leadership, company Tate & Lyle achieves economies of scale lowers
the average cost per unit through increased production. It is a global provider of ingredients
and solutions to the food, beverage and other industries, operating from over 30 production
facilities around the world. For evidence, Tate & Lyle is a large-scale corn processor. It grinds
over 750k bushels of corn per day, which is equivalent to 1.75 million acres annually. The
plant size and overall scale provides this company with a low-cost platform from which to
aggressively grow our value added portfolio.
For differentiation, company Tate & Lyle does investment in research and
development (R&D) capabilities to develop innovative solution that meet customers product
challenges. The company emphasizes their customers. It investigates and understands what
are the customers need deeply and create the products that can satisfy their customers. It
enables all the products from their company have high quality. Success in long term,
company Tate & Lyle requires a mindset of constant enquiry and a relentless search for how
to do things better. It knows that creating new, profitable products requires world-class ideas
and innovation in ingredients, food applications and process technology.
Besides that, this company also focuses on attracting and developing talent, and on
making sure their employees succeed. This company requires finding the right people who
have enthusiasm, tenacity and confidence as well as being technically competent and help to
develop their employees by providing training. Moreover, company Tate & Lyle create
opportunities which develop new skills and increases levels of competences and sponsor
educational and technical development through continuing education programs.
In addition, this company is not just concern about the quality of products and
ingredients it is also about customer services. It establishes and enhances long term customer

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relationship. This company provides more flexible delivery to work out the most efficient
way possible to get customers order to them in the form and at the time they want it.
6.0 Industry Analysis (Porters Five Forces)
6.1 Rivalry among existed firm
Refers to annual report on 2010, we will find out that Tate & Lyle
has go through very fast in industry growth compare to other company
and also their competitor. In 2010 report, Tate &Lyle has responded well to
the near-term financial priorities set at the start of the years, resulting in a
stronger balance sheet and solid overall performance in what have been
challenging market conditions.
Tate & Lyle is a global provider of ingredients and solution to the
food, beverage and other industries. Tata & Lyle is famous for their raw
materials, corn and cane sugar. Since their raw material is very important
in people life, this industry has growth very fast. Corn and cane sugar is
daily use products and there is less substitution products to replace them.
It is impossible for people to take sweet food without contain any sugar
ingredients.
High in industry growth mean high in concentration. Industry growth
will attract many competitors into the market. Although Tate & Lyle is one
of the biggest corn and cane sugar suppliers in this world, their main
competitors in Europe are Cargill, Syral (part of Tereos), Roquette Freres,
Danisco, Kerry and National Starch. Besides that, competition for Tate &
Lyle in European sugar businesses comes mainly from British Sugar which
called a subsidiary of Associated British Food plc, Sudzucker, Nordzucker
and Tereos. In this market, the concentration is still remaining high.
The differentiation in this market will be brand name, pricing,
advertising strategy and packaging. Tate & Lyle and their competitor are
producing same products, which is cane sugar and corn. So there will be
no much big different in their producing product in customer mind. Only

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the differentiation that available for customers to choose would be like

mentioned above. For instance, Tate & Lyle always choose the right pricing
according to the product quality. Conclude that higher quality means
higher in price.

Besides that, switching costs for customer is extremely low. This

also mean buyer can easily switching to buy from Tate & Lyle competitor
products. Low in switching cost cause lower loyalty for Tate & Lyle
products. In corn and cane sugar products, price different is extremely low.
Today, I want to buy Tate & Lyle sugar in hypermarket, but since no more
in shelf, I will only simply choose companys sugar since the price different
is only 20 or 30 cents. So low switching costs can cause customers easily
switch to other product.
6.2 Threat of new entrants
First mover advantage is very important for a company get luxury
profits. Even thought Tate & Lyle is not a first mover in this corn and cane
sugar market, but still they are great company. In the sugar cane industry,
Booker Brother, McConnell emerged as the largest sugar plantation owner
in British Guinea. In British, sugar was owned by a complex mix of
different types of firm, local and British owned, even before the largescale investments of the British sugar refiner Tate & Lyle in the 1930s.
There are also some legal barriers that stop other competitor from
entering the sugar industry. This is to prevent too much competitor in a
single market. There are investment cost and laws and regulations.
Investment cost mean cost that needed when entering in sugar industry.
This investment is to get all the machinery and the resources that needed
to operate in sugar market. According to one report, a company needs at
least 160 billion as 80 billion for sugar farms, 50 million on mills and 30
billion on refineries.

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Tate & Lyle has entered into five-year strategic partnership

agreement with Biovittoria Ltd. for the exclusive global marketing and
distribution right for BioVittorias monk fruit. Tate & Lyle will be marketing
the products in the US under the PUREFRRUIT[TM] brand name. This can
help Tate & Lyle to market the fruit. This distribution access is useful for
Tate & Lyle to enter another market easily.

6.3 Threats of substitute products

Tate & Lyle Caster Sugar 500g sell about $2.87 and Tate & Lyle icing
sugar will sell about $3.22. Caster sugar is for normal daily use and it can
be use with any food that we like while icing sugar will be more used on
making cake or biscuit. Tate & Lyle have market many type of sugar to suit
the customer demand. The pricing are quite cheap compare to other
competitor price and this has become one of the comparative advantages.
Some customer prefers Tate & Lyle sugar products because their
products have quality assured. They use Tate & Lyle products from the
very first day and they will not easily change to other products. Most
customers showed unwillingness to switch to other product even though
the price is lower. Tate & Lyle have built loyalty inside their customer
mind. Tate & Lyle always come out with sugar products that meet with
market demand. With this, customer can easily found sugar with different
purpose with Tate & Lyle sugar product.
6.4 Bargaining power of buyers
Switching costs of customer from Tate & Lyle sugar product to other
company product is extremely low. This is because the price of sugar
product is not high and the different is low. This mean if customer do not
like Tate & Lyle sugar product, he can easily switching to other company
product.

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Besides that, differentiation in customer perception also important

for Tate & Lyle sugar product. Most of the customer will choose back Tate
& Lyle sugar because they believe Tate & Lyle sugar are the best among
other company sugar. This is because after they already use it and they
felt the sugar is suitable for them. This will help them to differentiate Tate
& Lyle sugar with other company sugar. After that, they will continue buy
Tate & Lyle sugar in the future.

Sugar is one of the very important daily use products. And we can
say that sugar is important product for cost and quality. Tate & Lyle sugar
products are cheaper in price and better in quality compare to other
competitor sugar products. This is because Tate & Lyle is large company
which can operate efficiently and enjoy economy of scale. This will help to
reduce the Tate & Lyle production cost and then later lower price can be
enjoyed by customer.
6.5 Bargaining power of suppliers.
Since Tate & Lyle is a producer of its own sugar products, so there
will no bargaining power of suppliers. Tate & Lyle are producer and also
suppliers for its sugar products. Tate & Lyle will produce the cane sugar
with their own technology and sugar cane field. Tate & Lyle will not
depend on any suppliers. This gave Tate & Lyle a lot benefits from
reaching its own customers. Tate & Lyle can use their best way to produce
the product to maximum customers need. They can put their effort n
understanding their customers and serve them better.

7.0 Tate & Lyle Environmental (PEST) Factors

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7.1 Political Factors

7.1.1 Business Code of Conduct

The following Business Code of Conduct set out in abbreviated form

the

Tate

&

Lyle

Ethical

Commitment

and

Policy

Guidelines.

Tate & Lyle shares the widely accepted view that a greater level of
management control of a company that has more than one set of
operations, greater responsibility
policies.

Group

Ethical

for

ensuring compliance with

commitment

and policy

Group

guidance without

conditions to all

operating

units and subsidiaries are owned by Tate & Lyle itself.

Health & Safety - Tate & Lyle believed that no business activity is of
such urgency or importance that it may be carry out in an unsafe manner.
The Group target of an accident is to reduce them into zero. Group
committed to providing a
their employees and

safe

visitors to

and
their

healthy

environment for

premises, and is

committed

to continue to increase Health and Safety procedures and performance.

Safety committees comprise of employees work to ensure that safety
remain paramount- safety is not someone else concern, it is everyone
responsibilities. This is an ongoing process that requires continuous
training.

Environment - Tate & Lyle take seriously to the environmental issues,

striving to be good neighbours and to minimize the Group environmental.
All

operation

which

is

carried

out by

2the Group recognizes

the responsibility towards the natural environment in which we live and

work, and the Group comply with all local laws as applicable, and agree.

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The Group subscribes to the principal of the International Chamber of

Commerces Business Charter of Sustainable Development, and to be
popular definition of

Sustainable Development as a better quality of life

for everyone, now and generation to come. Tate & Lyle environmental
policies and operating procedures are supported by a written report that
requires the integration of environmental concerns into the operations,
training and management practices at all levels.

Human Right After operating in the developing world more than 60

years, Tate & Lyle recognizes that the primary responsibility of the
employer and source

of

income in

Tate & Lyle recognizes human

to reflect the business

rights

operations.

to discuss issues about

human

business with the government

or embargoes imposed by

the

and freedom and

This

rights related
and

the

community lead.

NGOs.

Group is
to

the way it

strive
open
does

Rare condition restrictions

international

community in

these

countries Tate & Lyle which business, the Group is the lead of the relevant
political authorities to ensure that the restriction is not broken and that
any observed trade embargo. Tate & Lyle reserves the right, where it is
able to do so, to withdraw from trade relations
countries where

it

is not possible for Tate & Lyle to

with companies or
operate under its

own policies and ethical standards.

Legal Compliance - Tate & Lyle will comply with all applicable local,
national, and supra-related national laws and regulations in each country
in which it operates. In These countries, or a particular situation, where
there are no laws or rules governing certain activities of operations, Tate &
Lyle will strive to operate in accordance with the principles of this Code.

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7.2 Economy Factor

7.2.1 Summary of Tate & Lyle Performance
Sales of 3,506 million from continuing operations were 1% lower
than the previous year. After excluding the impression of the exchange,
sales were lower 6. Primary sales decline of 4% (8% in constant currency)
from

2,584 million

to 2,476million.

The

decrease

is mainly

due

to declining revenue co product, lower industry sales volume in both

America and Europe and reduce the selling price of sugar isoglucose in
Europe,

reflecting

the institutional price cuts implemented

under

the EU sugar regime reform. Value-added sales increased by 6% (flat in

constant currency) to 1,030 million, this had representing about 30% of
Group sales.
Overall adjusted operating profit was in line with the previous
year that

is

decrease

by

7% inconstant currency

to 298 million.

Adjusted operating profit in the Food & Industrial Ingredients, America of

178 million is 2% lower than the previous year, 10% in constant currency
as a low income with product and reduce the starch industry profit was
partially

offset

by

increased

profits

from

the

ingredients value-

added foods.
Food & Industrial Ingredients, Europe achieved an increase in
operating

profits

of

6%(4% in constant currency) to 54 million, this

reflecting the growth in value added food ingredients and Food

System, partly offset by weaker primary food

and industrial starch

margins. Sugar deliver an increase of 150% (100% in constant currency)

to 30 million, this reflecting the expected increase in margin units in
the second half of the EU sugar this year.

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Adjusted operating profit in Sucralose has been reduce by

7%(9% in constant currency) to 67 million, with operating margins
reflect lower unit costs associated with making a transition to the location.
Central costs are increased by 13 million to 31 million, due mainly to
a one-off cost of 5million during the year associated with this review and
restructuring of the Groups activities, and certain one-off credit of
6million recognized in the previous year.
In addition to the effects of changes in exchange rates,
operating profit was influenced by a small number of items in the financial
year 2010.

We recognize

the

delivery

of

income

3 million quota

isoglicose in Romania; and incurred costs of 5 million in connection with

research and business restructuring done this year.
Amortization of acquired

intangible

is

14 million (2009-

15 million) was slightly lower than the previous year. Extraordinary

items amounted to a charge of 276 million (2009 - 119 million) have
been

addressed in the

executive study.

net financial expenses from

continuing

are increased from 51 million to

in accordance
of 4 million

with
over

the
the

While

69million.

the

operations
Effect

of

change

interests contributed caused

an

increase

previous

the charges in interest expense in

year.

We

the current

had

been

recognize

year related to post-

employment benefit plans 19 million (2009 - 3 million).

Net finance expense

A net financial expense from continuing operations is increased from

51 million to 69million.

Effect

of

change

in accordance

with

the

interests has contributed an increase of 4 million over the previous year.

They have recognize the charges in the interest expense in the current
year related
benefit plans 19 million (2009 - 3 million).

to post-employment
Interest capitalized

during

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the year reduced to 2 million of the 11 million in the corresponding

period, reflecting

the lower

capital expenditure and the decision to

suspend the completion and commissioning of Fort Dodge, Iowa plant.

Underlying net finance expense was below the level of the prior
year,

reflecting

significantly

lower

levels

of

average

net

debt.

Lower average net debt levels will benefit the interest expense during the
financial year 2011, although the mix of debt will result in an average cost
of debt will increase over the previous year. They expect net interest
charges related to post-retirement benefit plans to be around 6million in
financial year 2011. The effective interest rate for the year on the
operation amount, calculated as net financial expenses excluding net
financing charges related to retirement benefits and including capitalized
interest,

divided

cover for

the

by average

net debt is 5.3% (2009 - 5.0%).

operation amount,

calculated on

the

Interest

basis

of the

bank agreement was 5.8 times (2009 to 6.1 times).

Taxation
The Taxation charge from continuing operations before

items

and

amortization

of

acquired

intangible

exceptional
assets

was

47 million (2009 - 68 million).The effective rate of tax on adjusted profit

was 20.4% (2008 27.3%). This decline was due primarily to changes in
the geographical origin of profits, especially the lower level of profit in the
United States, and the impact of their internal financing plan. If the
mixture of geographical origin of profits in the year to 31 March 2011 is
similar to those in the year 31 March 2010, tax rates expected to
remain in the low 20% range.

Impact of changes in exchange rates

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They have

reported their

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financial

performance had

positive

impact this year with the translation of the exchange rate, mainly due
to the strengthening U.S. dollar (U.S.) and the average exchange rate
of euro against

the

pound.

In

addition

to the

impact

on profits, strengthening to the closing exchange rate of sterling which

has the effect of reducing net debt, with the benefit of net debt reported.

Interest rate risk

They are exposed to interest rate changes, arising principally from

changes in borrowing rates in US dollars, sterling and Euros. They have

manage this risk by fixing or capping portions of debt using interest rate
derivatives to achieve a target level of fixed/floating rate net debt. This
aims to optimise net finance expense and reduce volatility in reported
earnings. Their policy is that between 30% and 75% of Group net debt
(excluding the Groups share of joint-venture net debt) is fixed or capped
(excluding out-of-the-money caps) for more than one year, and that no
interest rate fixings are undertaken for more than 12 years.
A derogation of the maximum percentage of fixed-rate debt was
approved by the Tate & Lyle PLC Board until 30 June 2010. At 31 March
2010 the longest term of any fixed-rate debt held by the Group was until
November 2019. The proportion of net debt (excluding the Groups share
of joint-venture net debt) that was fixed or capped for more than one year
was 82% (2009 55%). If the interest rates applicable to their floatingrate debt rise from the levels of 31 March 2010 by an average of 100 basis
points over the year to 31 March 2011, with all other variables held

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constant, this would reduce Group operating profit before tax by

approximately 1 million (2009 4 million)

Foreign exchange risk

They

have

significant

investment

in

overseas

operations,

particularly in the USA and Europe. Earnings, cash flows and shareholders
equity are therefore exposed to foreign exchange risks. They require our
subsidiaries to hedge transactional currency exposures against their
functional currency once they are committed or highly probable, mainly
through the use of forward foreign exchange contracts.
Their accounting policy is to translate profits of overseas companies
using average exchange rates. They do not hedge exposures arising from
profit translation. As a result, in any particular financial year, currency
fluctuations may have a significant impact on our financial results. In
particular, a strengthening or weakening of the US dollar against sterling
will have a favourable or adverse effect respectively on the Groups
reported results.

7.3 Social Factors

7.3.1 Corporate Social Responsibilities
Tate & Lyle, corporate social responsibility equates to apply four core
values, which is safety, integrity, knowledge and innovation when they
conduct their business. This means that further progress in achieving
the highest

standards

of safety; consider

the environmental impact

of every aspect of what they do and treat employees, suppliers and the
communities in which they work as a long term partners. Putting these
concerns at the

centre

of their

business requires a

proactive management at all the levels within the group. The Board
reviews Tate & Lyles policies and performance annually, and the Chief

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Executive is the Board member accountable for all aspects of corporate

social responsibility.
Environment - Today, it is something that they must understand
and reduce environment impact. Most countries have signed up to targets
for carbon emissions, and legislation for the corporate world far more
stringent environmental issues is concerned. At Tate & Lyle, they believe
that to achieve sustainable growth in harmony with the environment, not
only social

responsibility, it's

business sense.

what customers

Therefore, they

are

want and it

committed

is good

to conducting

them

business in a manner that is sensitive to the environment and the

community in which they operate. They have defined environmental
standards and

practices

actively encourage their

in all of

partners to

their

operations, and

demonstrate a

they

similar level

of

commitment. All their operations fully integrate sustainable management

practices into their operational systems and procedures and their board
reviews environmental performance annually to ensure that they continue
to make progress in reducing their impact on the environment while
bringing economic benefits to Tate & Lyle.
Safety - Tate & Lyle has no higher priority than safety, which they
believe is

important

that ensuring a

to run

safe and

successful

healthy

business.

condition for

This

everyone

means
at their

website: employees, contractors and visitors. By reporting, recognising

and rewarding safety performance, they aim to ensure that all of their
operations to focus on continuous improvement.
Overall, their employee safety performance showed good
progress in 2008, particularly in reducing the severity rate. During another
year of heavy construction activity, they were pleased that they are
overall contractor safety index also improved significantly, although it is
lost-time and recordable injury rates for contractors both worsened.

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Employee health and wellbeing - At Tate & Lyle, they aim to lead
the way in employee health. Programs will different across the Group in
accordance with local needs, but all are based on the principle that the
Company have a role to play in helping employees improve their health by
supporting information, advice and others on health and wellness.
In

US,

Tate & Lyle continues

to

provide programs

and tools

to help employees become more informed consumers of health care

services themselves, and encourage them to adopt a healthy lifestyle.
There

are

some

Tate & Lyle continues

examples
to

of

their

programmes

provide programs

include

and tools

to help

their employees to become better informed consumers of their healthcare

services, and this have encourage them to adopt a healthy lifestyle.
Besides that, they also have offer wed-based system to their entire
employee, which is called Blue Points system. It provides a platform for
their employees to start and keep track of healthy behaviours. Employees
can

earn

points for meeting certain

health targets,

which

can

be redeemed online for health related products such as yoga mats and a
sports bag.
While in UK, nurse-led in Tate & Lyle was a health program which is
emphasizes in education and prevention and is often referred to as
a model for other businesses and public sector organizations in UK. The
major Initiatives include educating their employees on health and
wellness, and provide vocational rehabilitation as an alternative to
certificate the absence of disease and health promotion activities, health
clinic, advice on healthy eating, and counselling services. Besides that,
they also share elements of their program partners.
For instance, they have helped two communities in the absence
of management training and advice, and they host regular visits from the
trainee

of GPs and

doctors

from

Occupational

Health

Diploma

courses to assist their understanding of occupational health in a factory

environment.

They

also

offer

work

experience

to

the trainees

from occupational health nurse from South Bank and Brunel University.

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Communities

Tate & Lyle aims to play

a positive role in any community in which they operate. Over the past
few years, they have developed a Group-wide community of engagement
policy that form one of the core components under their ethical behaviour.
Their program involves building a long term relationships with local
partners to deliver a common objective, which is creation a strong, safe
and

healthy

communities by

investing time

projects that directly address local needs.

and

resources into

the

For example, in the financial

year ended 31 March 2009, Tate &Lyles total

worldwide charitable

donations is 674,000, up from 642,000 in the previous year, while

their total global pro bono contributions in

goods and services were

estimated to be 221,000, down from 254,000 the previous year. They

have support various initiatives and local organizations which involved in
the regeneration of communities around the world.
7.4 Technology Factors
7.4.1 How Tate & Lyle adding value
Nowadays,

there

are

rapidly

changing in

our

lifestyles which

are causing consumers to demand more from the products they buy no
matter in product department or service departments. This company have
their

own

expertise

in

and blending, specialist R & D knowledge

to help

them develop ingredients

processing carbohydrates
and insight into
that add taste,

increased functionality to their products customers

high-volume commodity base which

the

is

allows

Tate

market

nutrition and
&

them to

Lyle

have

run their

plants efficiently and produce low-cost substrate they can use to create a
special, higher margin products for both food and industrial customers.
These products are adding value through the fact that they are either
proprietary

to

Tate & Lyle, have a

greater function than

alternatives, or come up with additional services to customers. There have

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five ways to adding value in their product, which is research and

development, research partnerships, consumer insights and commercial
partnerships.

Research and development

Tate & Lyle have 280 people in R & D teams around the worldwide to

develop innovative ingredients from renewable resources.

In September

2008, they opened a new Innovation Centre in Lille, France, and they also
have application laboratories in

countries such

as

India,

China

and Australia which are combined with their sales offices.

Research and development capabilities are divided into three main
groups,

which

is

development

technologies and customer solutions.

into sweeteners,

health, text

animal feed.

Product

rants,

of products,

development is

divided

bio-products, industrial

This

and

group focuses

on developing new products and improving existing products. While the

technologies group is

include the

engineering, chemical analysis

and carbohydrates,

process

of

and bio-chemicals.

Their role is to determine how to create, analyze and produce ingredients.

The customer solutions

group

includes the

application and technical service team. The applications team is to

develop

prototypes

use their ingredients.

directly with their
into their products.

own

and
While

sensory

analysis for

the technical

customers to

incorporate

customers

who

services teams work

their

ingredients

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Research partnerships
To give them have a new ideas and insight into the market, they

had develop a partnerships with external research community. In October

2008, Tate & Lyle had contributed 4.5 million to support a new Clinical
Research Facility which is opened by Kings College London at St Thomas
Hospital. The aim of this Clinical Research Facility is to undertake research
into areas such as gastrointestinal health, carbohydrate metabolism, and
medical conditions such as obesity, diabetes and cardiovascular disorders.
With the cooperation with Kings College London, they allow Tate & Lyle to
to share knowledge and ultimately bring new products and technologies to
market.

Besides that, they also have a Research Advisory Group which is

comprise by a panel of six international industry and academic experts.
This

Research

Advisory

Group

development portfolio and provides

is
an

to

review the
understanding

research and
on

how

the technology can be applied to future development.

Consumer insights
The market they operate is to satisfy customers needs by

understanding their consumers. In 2005, they are one of the first

ingredients companies go directly to their consumer to understand what
drives purchasing habits, and what a user look in the future products.
They have used this insight to drive the development of their own
products, to differentiate themselves from their competitors and give their
customers advantage. Every year, Tate & Lyle will have run a programme

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of studies to canvass the views of consumer in Europe, the Americas and

Asia. Usually they will use the basic research attitudes like focus groups
as

starting

point

to complete

the program with a

detailed quantitative study.

This research is to shows a growing understanding of the benefits
of fibre

in

the

diet that

of their PROMITOR range

is

healthy, which
of

dietary

is

deal with

fibre.

variety

Their Research

and Development (R & D), marketing and regulatory teams have to work
together to provide insight from customer research, support on labelling
requirements, and assistance on meeting product demand.

Commercial partnerships
In order to grow their business, they have form a joint venture

or partnership to develop and distribute new products, and increase the

capacity if their existing portfolio of ingredients. By using alliances
and joint ventures can be an effective way to reduce costs and invest
in new markets, and this can gain an access to new and complementary
technologies and expertise. There have few examples about their
partnerships with McNeil Nutritionals (a Johnson & Johnson company) on
SPLENDA Sucralose, and with DuPont on Bio-PDO.

7.4.2 How Tate & Lyle creating volume

To satisfy the customer want about the quality ingredient, Tate
& Lyle will start with the process a large volume of raw material from
which we create the same basic products that are sold or used as a
starting point for the development of specific materials and branded
items. Produce this volume and large-scale

operation,

the

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plants effectively, enables

them

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to keep

unit

costs low throughout

the business. There have several ways to keep create the volume of raw
material, there is developing new technologies, protecting their expertise,
and manufacturing efficiency.

Developing new technologies

Tate & Lyle have their own research and technology team are

dedicated

to developing

the latest engineering

technology, for

their

existing plants and for new builds. Tate & Lyle have their own technology,
which is CORNBELT. The purpose of this technology is to increase the
starch yields while at the same time reduce per unit energy consumption.
Besides that, Tate & Lyle also used energy conservation technology in
their cane sugar refinery in London. They had invested 20 million in
refinery for biomass boiler is it assumes it will complete in March 2009.
When this is fully operation, they assume that this biomass boiler can
reduce refinerys carbon footprint for around 20% and it also can replace
fossil fuel with the use of renewable energy source. While for the sugar
business, they have their own specialist team, which is called Tate & Lyle
Process Technology. This specialist team is provided support services,
process engineering and design expertise to the sugar cane industry
worldwide.

Protecting their expertise

In order to support their business and protect their competitive

advantage, they need to maintain a large number of patents. They need

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to carry out product innovation and development work to result

in new technology,

patented or proprietary.

to monitor market

They

developments closely to

also

need

identify any

possible infringement of patents and intellectual property and take legal

action when they are necessary.

Manufacturing efficiency
In order to keep the factory operations safely and efficiently at high

volumes, they require a reliable manufacturing process and up-to-date.

The engineers who are actively involved in the manufacturing line and use
some tools of computer-based process for tracking and data model to help
identify opportunities

for

efficiency

improvements such

as increasing

revenues, reducing waste and saving energy. In US, they have run the
pilot plants in both corn wet milling and sucralose businesses by
dedicated teams which are used to identify a ways to make their
manufacturing processes more efficient. Process of improvement to
identify at their sucralose pilot plant within 12 months has enabled
them to achieve a breakthrough in product manufacturing.