Tate & Lyle today said that its flagship sweetener was helping ward off problems in other parts of its business as it reported continued good trading.

Tate said that a strong performance by Splenda sucralose had offset lower sweetener margins in its European food and industrial ingredients business.

Splenda had also helped it to reduce the impact on the group of higher cost export licences in its European sugars operation.

Tate, which makes sweeteners and other ingredients for food and drink firms, said it was using all its current production capacity to manufacture the high intensity Splenda.

The group said construction work was on track to expand a plant in Alabama in the US and to build a new factory in Singapore for Splenda.

Tate has experienced increasing success with the sweetener, whose exceptional growth helped it boost half-year profits by 9.2 per cent to £130 million in November.

It bought Splenda last year from partners McNeil Nutritionals. Last month, it said Coca-Cola was planning to use the product in a new version of Diet Coke.

Tate runs more than 40 plants and 20 additional production facilities across 28 countries and employs 6,700 people in its subsidiaries and a further 4,800 in joint ventures. Sales in the year to March 31 totalled £3.1 billion.

In a trading update today, the company said its overall trading performance had continued to be good and in line with its expectations.

It said its sugar operations in Canada, Vietnam and Mexico had continued to perform in line with its expectations and its food and industrial ingredients business in the Americas had done well.

Analysts’ current consensus is for profits of £238 million in the year to the end of March, compared with £228 million a year earlier.

Andrew Saunders, the Numis analyst, said that the weaker European performance had been well flagged up and that Splenda remained the key to future performance.

Splenda had strong prospects and the company’s inability to produce enough Splenda was the main factor holding it back.

"It’s well positioned for the long term," Mr Saunders said.

Tate & Lyle shares stood 5p higher at 545.5p in morning trade.

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