Supply chain disruption has lead to Tate & Lyle incurring £40m in costs for the first six months of the financial year, according to trading results released by the firm, and it is anticipating a further £10m in costs before the year is up.
Operational difficulties in the US caused by a prolonged and severe winter, which resulted in a £10m reduction in first quarter profits, and an extended shutdown of the SPLENDA Sucralose facility in Singapore caused supply constraints for the firm.
In addition, challenges in the plant network, low levels of inventory, and misalignment between customer demand and inventory availability lead to the disruption persisting longer than anticipated.
Javed Ahmed, Tate & Lyle CEO, said that he has instigated an immediate review of the firm’s planning and supply chain processes.
“The Group’s performance in the first half has been extremely disappointing as we have faced significant manufacturing and supply chain challenges, and intense competition in SPLENDA Sucralose,” he said. “ We remain firmly focused on taking the necessary actions to improve the Group’s performance and to deliver on our strategy.”
Despite the difficulties experienced, first-half group adjusted profit before tax is expected to be in the range of £95m-£105m.