AGM Statement

Tate & Lyle PLC
                  

28 July 2005 - Tate & Lyle PLC

CHAIRMAN'S AGM STATEMENT

At the Annual General Meeting of Tate & Lyle PLC to be held in London today, Sir
David Lees, Chairman, will make the following statement on current trading and
expansion plans:

'For the current year, there has been little overall change in trading
conditions or in the outlook since the beginning of June, when I signed the
Chairman's Statement in the Annual Report. I am pleased to confirm that trading
for the first quarter was in line with our internal expectations and marginally
ahead of the corresponding period in the prior year.

Across the business we have a number of expansion projects under way to
stimulate longer term growth in our value added segment. We have announced
capital projects to more than triple the sucralose production capacity acquired
under the realignment of the SPLENDA(R) Sucralose activities in April 2004 and
our new joint venture plant with DuPont to produce Bio-3G(TM) from renewable
resources should begin to come on stream in our financial year ending 31 March
2007. All of these projects continue to progress satisfactorily.

Earlier today we also announced expansion plans for both our Sagamore and Loudon
facilities in the US which will involve capital expenditure totalling £100
million.

The £43 million expansion to the Loudon, Tennessee, facility will enable Tate &
Lyle to increase production of value added products and supply substrate to the
Bio-3G(TM) joint venture with DuPont. It will also increase ethanol capacity by
37 million gallons per year. This expansion, which includes investment in
substantial environmental improvements, will not increase high fructose corn
syrup capacity. Subject to regulatory permit approvals, construction will begin
later this financial year and the new capacity will be operational in October
2007.

The expansion to the Sagamore facility in Lafayette, Indiana will cost £57
million and will increase capacity for food ingredient products. This will
contribute to the delivery of Tate & Lyle's strategy to grow the contribution
from value added products. The project also includes investment in substantial
environmental improvements. Subject to regulatory permit approvals, construction
will begin later this financial year and the new capacity will be operational by
January 2007.

These investments reflect our firm commitment to deliver against our growth
strategy and in particular to grow the contribution from value added products.
They were substantially provided for in the financial plans for the years ending
March 2006 and March 2007.'

Sir David Lees, Chairman of Tate & Lyle, will also make the following comments
at the Annual General Meeting later today:

'Many shareholders, but not all, will be aware of the content of the press
release that we issued on 23rd June 2005 in response to the publication by the
European Commission, the previous day, of new proposals for reform of the EU
Sugar Regime scheduled to take place on 1st July 2006. Our response contained
the following main points.

Firstly, there would be no adverse financial effect in the current financial
year to 31st March 2006. However, if unchanged the impact of the proposals would
be to reduce operating results by £20 million in the year ending 31st March
2007, £60 million in the year ending 31st March 2008, and £85 million in the
year ending 31st March 2009.

Secondly, these adverse financial impacts excluded the possible effect of market
forces across the range of industries likely to be affected by the proposals.
These adverse impacts also excluded mitigating actions that Tate & Lyle itself
will undertake in response to actual structural and commercial change.

Thirdly, the targeted improvements in operating results from our value added
products in the three years mentioned are expected to at least offset the
anticipated adverse impact of the Sugar Regime proposals.

Fourthly, the current proposals remain subject to negotiation and probable
future amendment at the Council of Ministers and final approval in the European
Parliament, a process that is anticipated to last until at least November 2005.

Our response went on to say that we considered the proposals to be seriously
inequitable and that we would be seeking a fairer and more satisfactory outcome
in the next few months. This was strong language and I therefore think it
appropriate to explain to shareholders why we chose the words we did.

As elaborated in our press release last month, the most significant part of
these impacts will be felt in our Food & Industrial Ingredients, Europe business
which produces isoglucose and other products which compete with and are
typically priced at a discount to sugar. The price reductions in the proposals
will have a significant impact here, particularly as the raw material used in
this business is either wheat or corn so, contrary to the position of, say, the
beet sugar processors, the regime can provide no offsetting adjustment in input
price to sustain margins.

Our cane sugar refineries in London and Lisbon would also be impacted by reduced
margins as the lower sugar prices in the current proposals would not be fully
offset by reductions in raw sugar prices. My remaining remarks today will be
focussed principally on the impacts on cane sugar refining.

In essence we believe that the proposals as currently drafted are inconsistent
with the Commission's stated undertaking to ensure the refining of sugar is
carried out under the fairest possible conditions of competition. In particular
the proposals as stated have the effect of reducing the Beet Processors' margins
by 44% but the Cane Refiners' margins by 77% in 2009/10. Margins for this
purpose can broadly be described as the difference between what the Cane
Refiners and Beet Processors receive for their finished products, which is the
same, and what they pay for their raw materials, which is different.

We have pointed out the inequity of the proposals to the Commission and to the
Department for the Environment, Food and Rural Affairs, known as DEFRA, which is
our sponsoring Ministry and we will continue to lobby hard for the fair
treatment originally promised. In this regard extracts from Paragraph 9.3 of
DEFRA's Regulatory Impact Assessment published recently following publication of
the Commission's current proposals make interesting reading. I quote:

'Given that the UK refiner, (that is Tate & Lyle) is arguably the world's most
efficient refiner, and is far more likely to prosper in a fully liberalised
market than beet processors, there is a strong argument in a partial reform for
a corrective mechanism to offset the continued distortions of a regulated price
system. This may take the form of a margin aid or ensuring sufficient raw
imports enter the community. The abolition of refining aid in the Commission's
proposal (refining aid is currently worth about £20 million a year to Tate &
Lyle) means that the institutional refining margin (for the cane refiners) will
be squeezed by a significantly greater proportion than the beet processing.'

The paragraph in question goes on to say:

'Whilst it should not be the objective of a liberalising reform to engineer
specific outcomes there appears to be little economic justification for
differential treatment between beet and cane.'

There are two further points about which I feel shareholders should be aware in
connection with the EU Sugar Regime. The first relates to a wide
misunderstanding of the purpose of the payment we receive each year from the
Rural Payments Authority which in the year to 15th October 2004 amounted to £127
million. The purpose of this payment is to enable Tate & Lyle to purchase raw
sugar from the African, Caribbean, Pacific and less developed countries, known
as the ACP and LDC, at EU established prices. These are some three times the
world price. The important point to realise is that Tate & Lyle does not retain
the £127 million. In effect the payment is passed through Tate & Lyle from the
European Union to the suppliers in those countries. This enables the European
Union to meet its long term obligations to purchase some 1.5m tonnes of raw
sugar a year. I would emphasise that the prices at which these purchases are
made are currently at about three times the world price.

The second point I want to make concerns the dependency of Tate & Lyle's sugar
business on the EU Sugar Regime. As most people will know the Regime has created
a highly regulated market with controls affecting both input and output prices.
However, shareholders should be aware that Tate & Lyle's EU sugar business is
not dependent on a regulated market for its prosperity. We believe we would
compete very effectively in a free non-regulated market as we do with our
Redpath Sugar business in Canada.

Furthermore, that assertion is not ours alone. Again I turn to DEFRA's
Regulatory Impact Assessment and quote from page 4 which states:

'As proposed, the reform threatens a substantial squeeze upon cane refining
margins, including in the UK, a sector which is otherwise well placed to compete
in a fully liberalised market.'

Page 89 of the same publication repeats this theme stating:

'Full liberalisation should not pose a great risk for cane refining within the
UK.'

The issue for us is the manner and speed at which deregulation and any move to
full liberalisation takes place. The manner is important because it governs the
preservation of the competitive balance between the Cane Refiners and the Beet
Processors. The speed is important because of the impact that moving from a
highly regulated to a less or even deregulated market has on the participants,
not least on our ACP and LDC suppliers. It would indeed be perverse if a
participant such as Tate & Lyle, that might be expected to do better than its
competitors in a totally deregulated market, were to end up disadvantaged
against its competitors in a partially deregulated market.

Tate & Lyle fully understands the need for reform of the EU Sugar Regime. Our
difficulty lies with the EU Commission's current proposals which further widen
the competitive imbalance between the Cane Refiners and the Beet Processors. As
I said earlier, we will be working hard to secure a more satisfactory outcome in
the months that lie ahead and I shall be disappointed if we do not have some
success.'

For more information contact Tate & Lyle PLC:

Mark Robinson, Head of Investor Relations
Tel: [phone] or Mobile: [phone]
Email: [e-mail]

Ferne Hudson, Head of Media and Public Relations
Tel: [phone] or Mobile: [phone]


About Tate & Lyle: 

Tate & Lyle is a world leading manufacturer of renewable food and industrial
ingredients. It uses innovative technology to transform corn, wheat and sugar
into value-added ingredients for customers in the food, beverage,
pharmaceutical, cosmetic, paper, packaging and building industries. The Company
is a leader in cereal sweeteners and starches, sugar refining, value added food
and industrial ingredients, and citric acid. Tate & Lyle is the world number-one
in industrial starches and is the sole manufacturer of SPLENDA(R) Sucralose.

Headquartered in London, Tate & Lyle is listed on the London Stock Exchange
under the symbol TATE.L. In the US its ADRs trade under TATYY. The Company
operates more than 60 production facilities in 28 countries, throughout Europe,
the Americas and South East Asia. It employs 6,700 people in its subsidiaries
with a further 4,500 employed in joint ventures. Sales in the year to 31 March
2005 totalled £3.3 billion. Additional information can be found on
www.tateandlyle.com.

SPLENDA(R) and the SPLENDA(R) logo are trademarks of McNeil Nutritionals, LLC
The DuPont Oval, DuPont™, The miracles of science™, Bio-PDO™ and Sorona® are
registered trademarks or trademarks of DuPont or its affiliates.