Exhibit
99.1
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Contact: Steve Pickman
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913-3670-1480
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FOR IMMEDIATE RELEASE:
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MGP INGREDIENTS ANNOUNCES PLANS
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FOR NEW
TECHNICAL CENTER AND
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CORPORATE
OFFICE BUILDING
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ATCHISON, Kan., October 13, 2005—MGP
Ingredients, Inc. (Nasdaq: MGPI)
unveiled plans today for the construction of a new product development
technical center and corporate office building in Atchison, where the company
has been headquartered since its founding in 1941. The company also announced plans for $1.9
million in upgrades to a facility that it recently purchased in Onaga, Kan.,
for use in manufacturing natural plant-based biopolymers. The projects, which were approved yesterday
by the Company’s Board of Directors, are being highlighted during MGPI’s annual
meeting of Stockholders today.
To be built at a projected cost of $2.5 million, the
technical center will be located on property at the southwest corner of the
intersection of Second and Commercial Streets in downtown Atchison. The new office building is expected to be constructed
at a cost of $2.2 million and will be located directly east of the technical
center. Property for the office building was purchased
last year from the City of Atchison and is situated adjacent to the town’s
recently developed Riverfront Park. Each
floor of the two-story technical center will encompass 9,800 square feet of
space, while each floor of the office building, also two stories tall, will
consist of 9,000 square feet. The
company expects to break ground for both buildings in early 2006, with
construction to be completed approximately one year later.
The technical center will provide new research
facilities and office space for the company’s research and development and
applications technology staffs. The new
office building will house MGPI’s corporate management, finance and accounting,
sales and marketing management and administrative staffs. Located at 1300 Main Street and built in 1979,
the current office building will be used by engineering and operations
personnel. Research laboratory
facilities, which currently are located one block east in a building that the
company purchased in 1987, will be converted to office space for quality
assurance, plant supervisory and environmental safety personnel.
“As our business has grown, our existing R&D and
office facilities have become inadequate,” Seaberg said. “More space is required to meet our needs now
and for the future to support our growth objectives. The new technical center, in particular, will
be a valuable asset in helping us strengthen our capabilities as an innovator
of naturally-derived ingredient solutions for the marketplace. It will provide better accommodations and
greater opportunities for us to pursue research and development initiatives,
while also enhancing our abilities to host and work directly with customers in
developing specialized product formulations.
I am very excited about the improvements that will come with the new
technical center and office building and am eager to break ground and move
these projects forward.”
-more-
ADD
1—MGP INGREDIENTS ANNOUNCES PLANS
Seaberg also expressed excitement about the planned
upgrades to the facility in Onaga, stating that “this project should position
our company very well for future growth opportunities in the area of
eco-friendly bio-based and biodegradable products.”
Acquired by MGPI last month, the 23,000 square foot
facility was used by the previous owner, Onaga Composite LLC, to produce wood
composite resins for use in the manufacture of extruded decking and fence
materials. Upgrades will primarily
consist of the installation of new equipment to facilitate the production of
the company’s starch and protein-based biopolymers, which can be used in the
manufacturing of both 100 percent degradable and partially degradable plastic-like
products, such as disposable cutlery, golf tees and a variety of other items. The upgrades are expected to be completed by
spring, 2006. Currently, the facility is staffed by six employees.
“Our acquisition of the Onaga plant gives us a dual
opportunity to fulfill our mission of providing product solutions derived from
natural sources,” said Michael Trautschold, executive vice president of
marketing and sales.” “The facility is
the ideal springboard from which we can launch our presence in the established
wood composite industry while also providing us with the infrastructure for the
production of fully and partially degradable biopolymers. We believe the market for these types of
materials will grow substantially in coming years as demand for alternatives to
traditional plastics increases.”
Increased interest in bio-economy initiatives is
among the “compelling market opportunities” that exist for MGPI, Trautschold
noted. Other opportunities that “should
bode well for the company,” he noted, consist of health and wellness lifestyle
trends in the food area, continued demand for natural versus synthetic
products, accelerated pet industry product growth, and growing use of
alternative fuels.
“Consumer desire for more healthful food alternatives
continues to contribute to food processors’ interest in wheat-based proteins
and starches,” Trautschold said. “In
particular,” he added, “consumers are looking for higher fiber and lower fat
food options, but are not willing to sacrifice taste and other sensory
qualities. These key market drivers
continue to fuel interest in two of MGPI’s newest starch products, Fibersym™
and FiberRite™ RW.”
These are among
“a number of opportunities that fit our growth strategy, which primarily
focuses on developing specialty ingredient products for growing markets while maintaining
the health of our distillery operations,” Seaberg said. Steps to support the latter occurred just
recently with the completion of a previously announced $12 million capital
project at the Atchison distillery and a $4 million project at the Pekin
distillery. The Atchison project
involved the installation of new equipment for processing distillers feed, the
principal by-product of the alcohol production process. At the Pekin facility, new distillation
equipment was installed. “Both projects,
which were begun in fiscal 2005, should increase our ability to realize
additional improvements in alcohol production efficiencies, especially in
regard to energy usage,” Seaberg said. “The
new equipment at the Atchison distillery also includes new state-of-the-art
emission control technology for continued compliance with government
environmental standards,” he added.
ADD
2—MGP INGREDIENTS ANNOUNCES PLANS
Seaberg said another principal component of the
company’s growth strategy is to “continue to improve our financial discipline.” He noted that “while we have always prided
ourselves in maintaining a strong balance sheet, we recognize that there are certain
areas where we can continue to strengthen our cost structure and improve our
overall financial well-being. These
include leveraging fixed assets by producing more specialty food ingredient
volumes from existing capacity; managing the cost of goods sold by protecting
grain and energy costs through a strengthened risk management program; and
utilizing new energy efficient technologies as these technologies become available
and are determined to be economically feasible.
Furthermore, we want to continue to maintain a strong working capital
position by generating cash through improved working capital management.”
Going forward, Seaberg noted that the company will
continue to allocate capital for increasing returns. “We will maintain our program of reinvesting
a portion of our profits to sustain growth and remain competitive,” he stated. “Such investments would include ingredient
capacity expansions as demand requires; distillery upgrades to further improve
efficiencies while continuing to provide the highest quality; sales and
technical support capabilities; and research and development initiatives.”
Seaberg said investments in the new technical center
and corporate office building fall under this same plan, “providing us with
much needed facilities that will enable us to continue to grow and evolve as a
customer-centric specialty products business.”
About MGP Ingredients
In business since 1941, MGP Ingredients, Inc.
is a recognized pioneer in the development and production of natural
grain-based products. The company has facilities in Atchison, Kan., Pekin,
Ill., and Kansas City, Kan. that utilize the latest technologies to assure high
quality products and to maintain efficient production and service capabilities.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains forward-looking
statements as well as historical information. Forward-looking statements are
identified by or are associated with such words as “intend,” “believe,” “estimate,”
“expect,” “anticipate,” “hopeful,” “should,” “may” and similar expressions.
They reflect management’s current beliefs and estimates of future economic
circumstances, industry conditions, company performance and financial results
and are not guarantees of future performance. All such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those contemplated by the relevant
forward-looking statement. Important
factors that could cause actual results to differ materially from our
expectations include, among others: (i) the availability and cost of
grain, (ii) fluctuations in gasoline prices, (iii) fluctuations in
energy costs, (iv) competitive environment and related market conditions, (v) our
ability to realize operating efficiencies, (vi) the effectiveness of our
hedging programs, (vii) access to capital, and (viii) actions of
governments.
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