British sugar maker Tate & Lyle has announced it is to mothball a factory in the USA though the firm said the move is due to a more efficient production process rather than weak demand.
The sucralose factory in McIntosh, Alabama is one of two that Tate & Lyle currently operate. However, the firm said a breakthrough in the manufacturing process means it can now handle all of its production needs from just one site and has chosen its newer plant in Singapore.
The new process yields 25 per cent more produce than the old one and Tate & Lyle said this represents only half the potential benefit.
Production will be phased out at the US site over the next few months but half of the 130 staff there will be initially kept on the books in case the firm need to restart production there.
The news was delivered alongside Tate & Lyle’s annual results which revealed pre-tax profits down from £182m to £113m, mostly due to the cost of the announced production changes.
Mothballing the US factory will cost £60m but the company expect the move to pay for itself within three years.