MGPI to consolidate wheat protein, starch operations

by FoodBusinessNews.net Staff
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ATCHISON, KAS. — MGP Ingredients, Inc. said it plans to consolidate the production of wheat proteins and starches at its facility in Atchison, effective Nov. 12. The move will result in the discontinuation of the company’s protein and starch manufacturing operations in Pekin, Ill.

"We have been very straightforward about our strategy to strengthen MGP Ingredients by becoming a more customer-centric, and therefore less production-driven supplier of value-added products with a special focus on our ingredient solutions and distillery products segments," said Tim Newkirk, president and chief executive officer. "Our decision to exit our protein and starch operations in Pekin and concentrate our efforts on the production of value-added ingredient solutions at our Atchison plant represents another critical step toward achieving this goal. The Atchison plant is equipped and has the flexibility to produce an array of specialty proteins and starches for both food and non-food uses. It also has available capacity to meet production requirements for certain proteins and starches in our remaining product portfolio that will no longer be manufactured in Pekin."

The changes in organization will result in 70 to 80 lay-offs and early retirement offers.

Mr. Newkirk said as a result of the changes, the company anticipates a special non-cash charge of $6.9 million to write down assets will be recorded during the second quarter, which ends Dec. 31. The company also expects to incur an estimated $3 million loss resulting from the sales of wheat no longer needed from milling operation.

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