MGP pours millions into wheat ingredients
Ingredients has earmarked $1.7 million to expand its line of
textured wheat proteins and wheat protein- and starch-based resins.
The investment comes on the back of strong first quarter results
for the segment.
The company's board of directors gave the all clear this week for plans for a $1.7 million expansion at the company's facility in Kansas City, Kansas. The project is in addition to a $3.8 million expansion that was launched at the facility last March and which is slated for completion in early 2004.
"As with the current expansion work, this new project is being initiated to enable us to meet additional growth opportunities by increasing our output capabilities for our Wheatex line of textured wheat proteins, as well as our Polytritricum line of wheat protein- and starch-based resins," said Ladd Seaberg, president and chief executive officer of MGP Ingredients.
The project will involve the installation of new equipment to increase production capacity and improve packaging capabilities at the plant which MGPI acquired in February, 2001, said the company in a statement on Tuesday.
Produced in multiple sizes and shapes ranging from small, crumb-like particles to shredded pieces and large flakes, the company's Wheatex line of ingredients are sold principally for use in meat replacement and meat extension applications. The are used in the production of protein-enhanced snack foods and other grain-based products.
Commenting on the new investment, Mike Trautschold, executive vice president of marketing and sales added : "It complements both our Atchison, Kansas and Pekin, Illinois operations, strengthening our ability to develop and grow our speciality ingredients."
The strategy to move further into speciality ingredients revealed positive signs for the company last month when this side of operations reported a solid set of first quarter results, offsetting a downturn in figures for commodity ingredients and in the face of higher energy and raw material costs.
Sales for the first quarter of fiscal 2004 rose 33 per cent to hit $57 million, up from $42 million for the same period a year ago, ushering in a net income of $6.7 million or 84 cents per share, although earnings for the period gained from a considerable $13 million in non-operating income from insurance proceeds.
First quarter sales for the company's speciality ingredients - primarily wheat proteins and wheat starches - counteracted a decline in sales of commodity ingredients, principally vital wheat gluten and commodity wheat starch. As a result, total sales in the company's ingredients segment rose by 62 per cent from the same period a year ago.
