The Irish sugar industry was mistakenly closed down four years ago but one company believes that its alternative sweetener could prove a success. Stephen Delaney's Fusion Nutraceuticals has developed a sugar alternative that will only have 1.7 calories per spoonful, compared to 16 calories in the same amount of sugar.

The new product is known within the company as NGRS but will have its own branding when it's launched next year. Fusion will license it to manufacturers around the world, earning income from licence rights and patent income from sales. Delaney is an industry veteran, having worked in the food-ingredients business since 1986, first with a subsidiary of agribusiness Dalgety, which is now part of Kerry Group, before he became one of the owners of Redbrook Ingredients, which he left in 2007.

After that he set up Fusion Nutraceuticals because he had been impressed with Splenda as a product, and sucralose, the core ingredient, had come off patent the previous year. Sucralose is 600 times sweeter than sugar and to make one tonne requires fives tonnes of sugar.

Fusion found a pharma company that could supply sucralose and began targeting retailers with its initial product, dubbed SucraPLUS. "It is a tough, challenging environment but we're in Asda in the UK now and we hope to announce some new retailers as customers in 2011," said Delaney. It also supplies Aldi and Spar and sells under its own brand name in nine international markets at a price pitched at about 40% below the price of market leader Splenda.

Now, the focus is on the new product. Research and development has taken several years and was done with Manchester University and the University of Nebraska. Fusion filed for patent protection for Europe in September and will do so worldwide in the coming months. The process can take up to two-and-a-half years.

It's already in advanced discussions with a leading consumer-goods company in India which distributes to 1.6 million outlets there, and that company plans to establish a dedicated manufacturing facility and produce the product under licence for distribution within India, where the retail sugar market is estimated at €4.5bn, and other Asian countries. Delaney went to India in October as part of the due diligence process and was impressed with its rapid economic growth, which is creating millions of new consumers. In addition, 8-9% of the population is diabetic and they can use the new product. "They like sugar in their tea," he said, so getting the right taste profile for local tastes will be the next challenge.

Fusion, which previously raised €200,000 from the BES scheme, is back in the market for a new round of funding. The Dublin-based firm is seeking €750,000 from BES-scheme investors before year-end to finance the development and commercialisation of the new product in the coming year. The investors in turn will get a 25% stake in the company. Promoters and management will invest more than €60,000, while Enterprise Ireland has indicated it will support it to the tune of about €140,000. Bord Bia is also assisting with market research and a sales strategy. "The €750,000 BES funding will enable us to complete consumer trials and commercialisation of the new product and it will support the continued sales growth of our SucraPLUS range," Delaney said.

In the six-year period up to 2016, Fusion is forecasting total revenues in excess of €10m. When the Indian deal is signed the company plans to replicate the arrangement with other major companies in North America, South America, Europe, Asia Pacific and other selected regions.

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