Exhibit
99.1
Contact: Steve Pickman (913)-367-1480
FOR IMMEDIATE RELEASE
MGP
INGREDIENTS, INC. UNDERGOES ORGANIZATIONAL CHANGES AS PART OF ONGOING
BUSINESS TRANSFORMATION PROCESS; NON-UNION STAFF CONSOLIDATIONS, REDUCTIONS
BEING IMPLEMENTED
ATCHISON, Kan., June 16,
2009—MGP Ingredients, Inc. (Nasdaq/MGPI) has announced additional changes
to the company’s organizational structure to better align with current and
future strategic initiatives. The
changes include a number of transitions and consolidations in management,
supervisory and administrative roles and are expected to result in a
combination of temporary lay-offs and early retirements affecting 16 non-union
personnel at the company’s Atchison facility by the end of June. An additional 4 non-union employees and 4
union employees at MGPI’s Pekin, Ill., facility will also be affected.
“The resizing of our plant
operations footprint in recent months combined with our intensified
concentration on producing and commercializing only those products which bring
unique value to our customer partners have driven this action,” said Tim
Newkirk, president and chief executive officer.
“MGPI has become a more streamlined organization, making it imperative
for us to evaluate and reconfigure certain job functions and responsibilities
to more accurately match our organizational needs while helping bring greater
balance to the cost structure of our resized business.”
Among principal role changes
is the appointment of Scott Phillips to the newly created position of vice
president of supply chain operations. In
this capacity, he will oversee all manufacturing-related processes, from the
acquisition of raw materials through the production, packaging, warehousing and
delivery of MGPI’s protein, starch and alcohol ingredients. Phillips joined MGPI in 2007 and has served
as corporate director of manufacturing for the company’s ingredient solutions
business segment since June, 2008. He
previously spent 17 years in plant supervisory and management positions with
General Mills, Inc.
In assuming his new
position, Phillips takes on the oversight of alcohol production
responsibilities that previously were managed by Randy Schrick, vice president
of engineering, who also had served as corporate director of manufacturing for
distillery operations since last June.
Schrick, who has been with MGPI since 1973 and is also a former member
of the company’s Board of Directors, will continue in his engineering role.
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ADD 1—MGP INGREDIENTS, INC.
UNDERGOES
Don Coffey, Ph.D., will
oversee innovation and commercialization activities for the company’s alcohol,
as well as protein and starch ingredients in his new role as executive vice
president of sales and marketing. He had
served as executive vice president of the company’s ingredient solutions
business segment since last June and was vice president of innovation for
one year prior to that. He came to MGPI
in July 2007 following 22 years in commercialization and research
positions with the Dow Chemical Co. For
12 years beginning in 1985, he worked in the commercial and research operations
of the METHOCEL business, a global business unit within Dow’s Special Chemical
Group that manufactures cellulose derivatives for a variety of food and
non-food applications. He was later promoted
to general manager of Dow Food Stabilizers, with responsibilities for global
sales, marketing and research.
Additional staff changes
consisting of a reorganization of certain job functions, as well as various job
reductions, are being implemented across most service centers and business
units within the company. These are a
follow-up to similar measures taken earlier as the result of key business
transformation actions.
As previously announced, the
company shut down its wheat flour milling operations at the Atchison facility
this past October. Approximately one
month later, wheat protein and starch operations at the company’s Pekin, Ill.,
facility were discontinued, followed by the discontinuation of alcohol
production at that location in February.
“These individual actions
have all been significant steps in our larger business transformation process
aimed at concentrating our efforts on optimizing our capabilities for the
development, production and commercialization of value-added products primarily
at our Atchison facility,” Newkirk said.
“The flour mill shutdown has given us the ability to outsource higher
quality flour and achieve improved yields when converting that flour into
value-added proteins and starches. With
the discontinuation of protein and starch production at Pekin, we have
substantially exited the commodity wheat gluten and starch areas of our
business and consolidated our production of value-added ingredients to
Atchison, where we have tremendous capacity to grow. The discontinuation of distillery operations
in Pekin, where the vast majority of our fuel grade alcohol was produced, was
in line with our decision to exit the volatile and highly unpredictable fuel
alcohol business. Instead, we are now
applying our distillery expertise and resources on the production and sales of
high quality food grade alcohol, an area in which we are a major player and
have been since the company’s founding nearly seven decades ago.”
In conjunction with these
measures, several temporary and permanent lay-offs involving both union and
non-union employees were enacted.
Combined with a number of early retirements, MGPI’s workforce compared
to this time a year ago had declined by 44 percent to 237 employees prior to
today’s announcement.
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ADD 2—MGP INGREDIENTS, INC.
UNDERGOES
“The company’s
transformation has been extensive and has required some extremely difficult
decisions, particularly in regard to personnel reductions,” Newkirk said. “However,” he added, “these decisions have
been necessary. They are driving us
along the right path to strengthen our position as a provider of innovative
ingredient solutions, including world class food grade alcohol. MGP Ingredients principally serves large
national and international producers of packaged, name brand bakery and
processed food products, vodka, gin and liqueurs, and a wide range of
applications for food grade industrial alcohol, including foods and condiments,
pharmaceuticals, personal hygiene products, household cleansing products and more.”
Newkirk continued: “We
consider ourselves as an extension of key targeted customers, supplying not
just ingredients, but solutions to help them create better products for the
consumer. All of the actions we have
taken thus far as part of our transformation process, including this most
recent internal restructuring, have been implemented to ultimately make us a
stronger, more accomplished competitor in the markets we serve.”
About
MGP Ingredients
In business since 1941,
MGP Ingredients, Inc. is a recognized pioneer in the development and
production of natural grain-based ingredients and alcohol products for the
branded packaged goods industry. The Company has facilities in Atchison, Kan.,
Pekin, Ill., Kansas City, Kan., and Onaga, Kan. that are equipped with
state-of-the-art technologies to assure high quality products and to maintain
efficient production and service capabilities.
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