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01 Feb 2005
International refined sugar specialist Tate & Lyle is best known for its no-calorie SPLENDA Sucralose. Now, Singapore has earned the honour of being the only manufacturing site outside the US to produce this leading brand of sweetener.
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Come 2007, it is highly probable that a third of the world's leading no-calorie tabletop sweetener would have been manufactured on Singapore shores. The health and weight conscious and renowned food and beverage (F&B) manufacturing companies will be familiar with this no-calorie sweetener - SPLENDA Sucralose. Manufactured by the London-based Tate & Lyle (www.tateandlyle.com), an international renewable ingredients conglomerate, SPLENDA Sucralose has found its way into a staggering number of homes, restaurants and food factories. To date, the product is used to sweeten over 4,000 products around the world, from breakfast bars to ice creams.
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After three decades of extensive research, Tate & Lyle now holds over 30 patents for manufacturing sucralose, making it the only producer in the world.
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Splendid SPLENDA
- Health-conscious consumers are swtiching to the no-calorie SPLENDA Sucralose
- F&B makers fancy the product as it has a longer shelf life to aspartame and is heat resistant
- Sales have "far exceeded" expectations
Currently, the scales are tipped in Tate & Lyle's favour. The company holds over 30 patents for manufacturing sucralose, making it the only producer in the world. This has come through after nearly three decades of extensive research and development (R&D) that has run into millions of dollars, but Tate & Lyle's efforts have paid off in a massive way, since the company first commercially released SPLENDA Sucralose into the sweetener market in 1992.
But SPLENDA Sucralose is no ordinary sweetener. There are many reasons why sucralose has become the sugar substitute of choice for both consumption and manufacture. Its popularity has skyrocketed due to the product's claim that it is "made from sugar, so it tastes like sugar." In today's increasingly health-conscious society, consumers are making the switch from other sweeteners like aspartame and saccharine in favour of the no-calorie SPLENDA Sucralose. In turn, this is good news for F&B manufacturers, who are also giving SPLENDA Sucralose the thumbs-up for its longer shelf life to aspartame, as well as its resistance to high heat. Furthermore, SPLENDA Sucralose is a high intensity sweetener - it is 600 times sweeter than normal sugar.
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SPLENDA Sucralose is used in over 4,000 products worldwide
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Indeed, this has resulted in a boom for Tate & Lyle, which counts amongst its clients big names such as Coca-Cola, PepsiCo, General Mills and Kraft. But being the sole manufacturer in the world has brought on an onslaught of challenges - for one, demand has exceeded supply. The company announced in December 2004 that it would "not be in a position to supply any new customers," and, in a written statement to the Atlanta Journal-Constitution, added that "we will work with our current company base in order to manage their sucralose requirements going forward."
Whilst this rationing sounds like bad news, Mr Iain Ferguson, Chief Executive, Tate & Lyle, is positive. "It is a good problem to have," he said. "Except that it is frustrating in that you'd like to be able to satisfy more customers. But it's much better than the other way around, isn't it?"
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Illustrated depiction of Tate & Lyle's maiden global manufacturing facility in Singapore
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Add to the mix
- Singapore selected as site for a new $286m (US$175m) global sucralose manufacturing plant
- Republic chosen as production locale for its strong intellectual property (IP) protection
- Over 100 new jobs will be created by 2007, the expected date of completion
Measures are already in place to keep up with international customers' needs. Currently, the company has one sucralose manufacturing plant in Alabama, and S$123 million (US$75 million) has been committed to doubling production capacity there by 2006. But that is not the only contingency plan in the works, and this is where Singapore comes into the big picture.
Interestingly, Tate & Lyle has been largely a US- and Europe-focused company, but it made headlines last year when it announced that it would be building its second sucralose production plant in Singapore. The groundbreaking of the production plant site on a sprawling 11 hectares of land on Jurong Island is a milestone as Tate & Lyle is the first global player to produce such a specialised ingredient in the city-state.
The investment will cost the sugar giant S$286 million (US$175 million), and completion of the project is expected sometime in early 2007. When fully operational, it is expected that the Singapore plant will help serve the burgeoning global market and boast an output capacity two-thirds that of the company's US-based factory.
Tate & Lyle has decided to shift major manufacturing operations to the Republic for its internationally renowned and secure IP environment.
According to Ms Ferne Hudson, Public Relations Manager, Tate & Lyle, a primary reason why Tate & Lyle decided to shift major manufacturing operations to the Republic was Singapore Economic Development Board's (EDB) offer for enhanced IP protection for the company's numerous patents in an internationally renowned and secure IP environment. Singapore was a natural choice due to its attractive tariff structures, availability of a highly skilled workforce and proximity to key markets.
"The new plant will broaden our manufacturing base and help facilitate improved access to the Asian and European markets," said Mr Ferguson. "Sucralose has enjoyed success in Japan since the first products were launched there in 1999 and we aim to replicate this success across the region."
"We have received excellent support from the EDB and look forward to future cooperation," continued Mr Ferguson. "The SPLENDA Sucralose manufacturing process is sophisticated and patent-protected and technical training of key members of the operational workforce in Singapore will begin shortly to ensure the creation of an expert local workforce ahead of plant commissioning."
It is anticipated that over 100 high-entry jobs will be created once the Singapore sucralose facility is up and running. Professionals to be employed include chemists, electrical control engineers, process engineers, diverse technical specialists, as well as sales and administrative staff.
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SPLENDA Sucralose offers consumers a greater range of reduced calorie food and beverages
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Sugar rush
- Global sweetener industry expected to exceed S$309m (US$189m) worth of sales by 2008
The outlook for the international sweetener market is definitely encouraging. Tate & Lyle, in particular, is continuing its grip on its sucralose production patents, and the ingredient is already permitted for use in at least 80 countries around the world. Market analyst Freedonia is forecasting that the growth spate of sweeteners will be around 8.3 per cent year on year until 2008, with sales rising from a mere S$133 million (US$81 million) in 1998 to a sensational S$309 million (US$189 million) a decade later.
Complacency though, is the last route Tate & Lyle wants to take as it is aware of the aggressive competition; it is conducting taste trials for products containing ingredients from across its portfolio.
Through strategies like this, and despite his relatively brief tenure as Chief Executive since he took over the reins in May 2003, Mr Ferguson clinched the honour as Forbes' Europe's Businessman of the Year 2005.
"Increasingly," said Mr Ferguson of his company's direction, "we find that what we're doing is talking to customers' marketing people and their innovation people rather than just their buyers." One thing is for sure, that is not just sweet talk - it is serious business.
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Singapore beckons specialty ingredients
Following Tate & Lyle's announcement that it was breaking ground for its second international sucralose production facility in Singapore, Mr Teo Ming Kian, Chairman, EDB, expressed his pleasure in the UK company's decision to base operations here in its first major manufacturing investment in the country.
''High value specialty ingredients is an area that has tremendous potential in Asia as this region develops,'' said Mr Teo, adding that Tate & Lyle's vote of confidence in the island Republic ''reaffirms our position as a strong combination of trust, science, innovation and connectivity to end markets which will sharpen the competitive edge of these companies.''
A global centre for scientific R&D, testbedding and innovation, Singapore has been stepping up efforts to establish itself as a choice location for specialty ingredients activities. Singapore's excellent IP protection environment, springboard to the developing Asian economies as well as stringent food standards are additional benefits for companies operating or looking to base their specialty ingredients operations in the country.
In 2003, the industry experienced a manufacturing output growth spate of S$680 million (US$416 million), double that of 1996. Meanwhile, the value-added (VA) per specialty ingredients worker was S$198,000 (US$121,000), double that of workers in the manufacturing sector.
Specialty ingredients include high value additives (such as emulsifiers, flavourings, texturants, colourants, stabilisers and enzymes) that are used mainly in confectionary, dairy, as well as other F&B applicants.
Today, the Lion City is home to nine of the top 10 international Flavours & Fragrances (F&F) companies, which include Givaudan, IFF, Sensient, Takasago and Firmenich. These heavyweights use Singapore as their nerve centres for the R&D and creation of regional flavours, and also conduct extensive manufacturing operations here.
Besides Tate & Lyle's latest entry as a sucralose producer, other specialty ingredients rolled out from Singapore's shores include Faci and Croda's consistency enhancers, along with Fuji Oil's specialty oils and fats. Regional R&D for specialty ingredients include the likes of Degussa, National Starch and Rhodia, all diversified and established food additive companies.
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