Tate & Lyle questioned over Alabama factory plans

- Last updated on GMT

Related tags: Sucralose, Tate & lyle

Tate & Lyle was yesterday taken to task by environmental groups
and local residents over its plans to extend its Splenda factory in
McIntosh, Alabama, reports Philippa Nuttall.

The British company, whose popular sweetener is marketed by US partner Johnson & Johnson, wants to increase the plant to keep up with demand for the ingredient.

However, the Alabama Department of Environmental Management (ADEM) on Tuesday held a public hearing, allowing locals and green groups to voice their concerns over the construction of a second chlorination process at the McIntosh site.

The expansion would allow Tate & Lyle to achieve its original permitted production capacity as well as enhance the facility's phosgene generation and chlorination capacity. But, opponents are concerned the plant could increase pollution and are worried about its close proximity to schools and houses.

Last year Tate & Lyle announced plans to spend £16m increasing production of the sweetener at its plant in McIntosh, Alabama.

The company - currently the market leader - could soon be facing further competition, analysts suggested last week, as its hold over certain patents is dimished.

The broker Goldman Sachs downgraded Tate & Lyle to 'underperform' from neutral, suggesting the artificial sweetener will face competition from alternatives soon as important expiry dates in 2006 and 2009 for patents could motivate the competition.

The UK sweetener company currently has 32 different patents (from commercial blends and products to processing) protecting Splenda; but it is not just the patents that are supporting the market leadership, says Tate & Lyle.

"The product is well established, we have a 3rd generation plant, we're the leaders and we are expanding,"​ said a spokesperson for the company.

But despite this market armament, one day, possibly soon, the firm will face competition (likely from China); heralding lower costs for food and beverage makers as sucralose makers compete for market share.

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