The divestment is the latest stage in Tate & Lyle’s sale of its sugar trading business, announced in July 2008 with the sale of its international sugar trading business to oilseed giant Bunge. Tate & Lyle said that the sale would reduce its exposure to volatile commodity prices and allow the company to concentrate on its core refining operations in the European Union.
Although neither company would disclose the value of the agreement, a spokesperson for Tate & Lyle told FoodNavigator.com that the sale would cover its 9.68 per cent stake in the Saudi Arabian refinery and its 3.58 per cent stake in another refinery in Egypt.
He said: “When we announced the sale of our International Sugar Trading business in July 2008, we made it clear that the business sold excluded a small number of minority interests related to the sugar trading business which would be disposed of separately in accordance with the related shareholders agreements.”
The deal reflects the company’s move away from being a commodity processor and trader to a focus on higher value products.
The Savola Group, the largest sugar refiner in the Middle East, is already the principal partner in these two facilities, with a 64.8 per cent stake in the United Sugar Company, which runs the Saudi refinery, and a 53.5 per cent stake in the United Sugar Company of Egypt (USCE), which runs the Egyptian refinery. The two facilities have annual production capacity of 1.2m MT, and 750,000MT respectively, according to Savola.
Savola said in a statement that the USCE intends to increase production capacity at the Egyptian refinery to 1m MT per annum by adding a beet sugar line.