Tate & Lyle PLC and BBCA Biochemical of China announce the signing on 17 July of an agreement for Tate & Lyle to distribute BBCA citric acid products outside China. This agreement is a first step towards a broader global alliance and will be submitted to the EU Authorities for approval.
Under the agreement, Tate & Lyle will purchase BBCA products, which it will distribute under a joint brand. Input from the Tate & Lyle technical team will ensure product quality matches Tate & Lyle’s world-leading standards. This agreement extends Tate & Lyle’s citric acid range and offers customers global access to a comprehensive portfolio of quality products.
Similar arrangements for products other than citric acid are currently under discussion as are arrangements for BBCA to handle the import into China of complementary Tate & Lyle products.
A joint venture to construct a new corn wet mill in Bengbu, China is also under negotiation. Within this agreement, which is expected to be signed in autumn 2002, Tate & Lyle will contribute technology, manufacturing expertise and up to US$10 million cash in return for a 25% equity stake in this plant. The joint venture is one of three such enterprises planned by the Chinese Government and will provide the raw material for the production of ethanol, reducing reliance on imported oil. A range of other fermentation products may also be produced to service growing Chinese demand and exports.
Larry Pillard Chief Executive Tate & Lyle PLC: "I welcome this agreement, which brings together two complementary organisations and provides the opportunity for each to grow within a low-cost environment. Tate & Lyle brings a portfolio of technology, manufacturing excellence, quality brands and a global reach. BBCA has low-cost carbohydrate processing capabilities in Asia that complement our strengths in the Americas and Europe. We view this agreement as a positive move towards improving the return from our citric acid division."
Roger Li Chairman, BBCA Group: "We are pleased to take the first steps in a relationship that offers the opportunity to enhance BBCA’s access to global markets – first for citric acid and later for other products. In addition, co-operation with Tate & Lyle will accelerate our ability to meet China’s internal need to substitute petrochemical-based products with those based on renewable carbohydrate sources."
About the Alliance
BBCA has low-cost carbohydrate processing capabilities in Asia that complement Tate & Lyle's strengths in the Americas and Europe. Tate & Lyle offers manufacturing expertise based on technological leadership, together with the global marketing reach of its brand.
The distribution agreement gives Tate & Lyle access to Citric Monohydrate, and completes its offering of Citric Acid products. Tate & Lyle will therefore be able to offer its Customers global access to a comprehensive portfolio of quality citric acid products.
The joint venture corn wet mill will add new ethanol capacity that will enjoy significant support from the Chinese Government because it will use China’s substantial grain surpluses to replace petroleum, which is currently predominately met by imports. The proposed joint venture is one of a total of three such enterprises planned by China and will be allocated a specific geographic area in which to distribute its products.
About BBCA
BBCA Group consists of more than 30 holding companies, wholly-owned companies and joint ventures in China, three overseas companies, one biochemical R&D centre as well as one pharmaceutical R&D centre, among which Anhui BBCA Biochemical CO. Ltd. and Anhui Xinli Pharmaceutical CO. Ltd. are quoted companies.
BBCA produces starch, citric acid, sweeteners and vitamin products from cereal grains and is further developing biochemical and pharmaceutical products including organic acids, amino acids, polymers and fuel ethanol.
The company has a programme to improve its environmental performance and minimize the impact on the environment. During the past years, it has invested significant capital to make improvements in performance, including upgrading of an effluent treatment plant. BBCA is ISO9002, ISO14001, OU Kosher and Halal certified.
About Tate & Lyle
Tate & Lyle is a world leader in carbohydrate ingredients. Its core competence is to take basic carbohydrates from corn, wheat or sugar and add value to these raw materials through technology. As a result of continuous innovation the Group offers an ever-wider portfolio of versatile and functional ingredients. These products include cereal sweeteners, starches, sugars and citric acid. Tate & Lyle products have wide applications in the food, beverage, pharmaceutical, cosmetic, paper, packaging and building industries.
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About Tate & Lyle PLC:
Supported by our 165-year history of ingredient innovation, we partner with customers to provide consumers with healthier and tastier choices when they eat and drink. We are proud that millions of people around the world consume products containing our ingredients and solutions every day.
Through our leading expertise in sweetening, mouthfeel and fortification, we develop ingredients and solutions which reduce sugar, calories and fat, add fibre and protein, and provide texture and stability to food and drink in categories including beverages, dairy, bakery, snacks, soups, sauces, and dressings.
Tate & Lyle recently acquired CP Kelco, a leading provider of pectin, speciality gums and other nature-based ingredients to create a leader in mouthfeel, significantly enhancing our solutions capabilities. Following this combination, we now have more than 5,000 employees working in around 75 locations in 39 countries, serving customers in more than 120 countries. Science, Solutions, Society is our brand promise and how we will achieve our purpose of Transforming Lives through the Science of Food. By living our purpose, we believe we can successfully grow our business and have a positive impact on society. We live our purpose in three ways, by supporting healthy living, building thriving communities and caring for our planet.
Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. For the year ended 31 March 2024, and on a pro forma basis which assumes for illustrative purposes that the combination with CP Kelco took place on 1 April 2023, revenue for the enlarged Tate & Lyle Group would have been £2.25 billion. For more information, please visit www.tateandlyle.com or follow Tate & Lyle on LinkedIn, X (Twitter), Facebook or YouTube
