TATE & LYLE has signalled that it is prepared to quit sugar manufacturing, severing links with the industry on which the company’s fortunes have been built for almost 150 years.

The company’s chief executive, Iain Ferguson, has indicated he is prepared to sell the sugar operations as the industry is reshaped after changes in how prices are regulated in Europe.

Tate & Lyle can trace its origins to 1859, when Henry Tate started refining sugar cane in Liv-erpool. Abram Lyle from Green-ock, near Glasgow, bought a share in a refinery in 1865. The two companies merged in 1921.

Ferguson has come under intense pressure after three profit warnings this year. Shares in the company have plummeted, and are now little more than half the peak touched in December last year. It is likely to be ejected from the FTSE 100 next month.

Tate & Lyle last week unveiled figures for the six months to the end of September.

Ferguson dropped heavy hints that the company is prepared to sell once changes in Europe’s sugar regime are fully implemented in 2010. These are likely to trigger a wave of mergers in the industry, he suggested.

Tate & Lyle’s results statement said: “We anticipate consolidation in the EU sugar industry and we expect that Tate & Lyle will be part of this.”

Ferguson later told analysts: “We’ll take the decision in the best interests of maximising shareholder value.”

Sugar last year accounted for almost half of the group’s turnover but less than 19% of operating profits.

If Tate & Lyle cannot achieve a satisfactory sale of its sugar businesses, it may seek a partner with which it could combine its operations in a joint venture.

In Britain, Tate & Lyle’s refining operations employ about 1,000 people at a plant near the Thames Barrier in east London. A smaller plant, at nearby Plaistow, makes Golden Syrup.

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