Sweeteners producer PureCircle (LON:PURE) has signed a Memorandum of Understanding with British Sugar Group to set up 50/50 joint venture Natural Sweetness Company, which will develop and market a range of products for the food and beverage industries.
The new company’s production will combine sugar and sweetener dereived from the stevia planr to meet the requirements for reduced calorie natural sweet applications. The company will operate across British Sugar's core territories of the UK, Spain, Portugal, Ireland, China and Africa.
“We know that our global customers want naturally reduced calorie sweetener options provided to them around the world to complement their existing sugar options. When we were looking for global partners British Sugar was the stand out choice across all measures in its core markets. As we work together it is clear that there is a strong alignment in how we see the sweetener market developing,” said PureCircle chief executive and president Magomet Malsagov.
Back in February, the company established the Natural Sweet Ventures JV with US based Imperial Sugar, the venture being the first to market a combined sucrose and stevia product range. PureCircle stated that the customer response in the NAFTA market has been “strongly supportive.”
PureCircle today also released a management statement ahead of its full year results, which will come out in September. The company expects to report sales for FY2010 in line with those of the year to 30 June 2009. The FY 2009 Reb A sweetener business was based substantially on sales to just two customers with 60% of all sales going to a trading partner as opposed to an end-use food and beverage business. However, the contract with that company was ended in accordance with the company’s new strategy of working directly with end-user clients.
The customer base has expanded to over 100 invoicing customers during the year with most of them currently conducting trials and testing launches. PureCircle stated that those products already launched provided it with “an excellent platform for strong growth in FY 2011.”
However, as overheads have increased in the past year along with sales and markets, profitability will be below the FY 2009 levels.
PureCircle ended 2010 with gross cash of US$65 million.
The outlook for 2011 was positive with PureCircle expecting to see more customers launching more products in more countries and accelerating growth in the overall markets. The JV announced today is expected to bolster the “strategic progress” anticipated by the company in the coming year.