Profile: MGP Ingredients Inc (MGPI.O)

MGPI.O on Nasdaq

12.46USD
19 Sep 2014
Price Change (% chg)

$1.66 (+15.37%)
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$10.80
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$13.20
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MGP Ingredients, Inc., incorporated on June 26, 1957, is a holding company. The Company operates through its subsidiaries, which include MGPI Processing, Inc. (Processing) and MGPI of Indiana, LLC (MGPII). The Company produces certain distillery and ingredient products which are derived from corn, rye and barley, and wheat flour, respectively, primarily to serve the packaged goods industry. The Company has three business segments: distillery products, ingredient solutions and other. Its distillery products segment consists of food grade alcohol, along with a minimal amount of fuel grade alcohol and distillers feed, which are co-products of its distillery operations. The ingredient solutions segment products primarily consist of specialty starches, specialty proteins, commodity starches and commodity vital wheat gluten. Its other segment products are plant-based biopolymers and wood-based composite resins manufactured through the further processing of certain of its starches and proteins and wood particles. On December 27, 2011, the Company acquired Lawrenceburg Distillers Indiana, LLC. On January 3, 2012, Processing reorganized into a holding company structure through a merger with MGPI Merger Sub, Inc.

The Company purchase corn, rye and barley, which it uses in its distillery operations, primarily from or through grain elevators. It purchases wheat flour, the raw material used in the manufacture of its protein and starch products at its Atchison facility, from ConAgra Mills. Its wheat protein products are dried into powder and sold in packaged or bulk form. It further processes the starch slurry which results after the extraction of the protein component to extract wheat starch. It mixes the remaining starch slurry with corn and water and then cook, ferment and distills it into alcohol. It dries the residue of the distilling operations. At its distillery located in Lawrenceburg and Greendale, Indiana (Indiana Distillery), it produces grade corn and rye whiskeys, bourbon, gin, grain neutral spirits and distillers feed.

Distillery Products

The Company’s Atchison plant processes corn, mixed with starch slurry from the wheat starch and protein processing operations, into food grade alcohol and distillery co-products such as fuel grade alcohol and distillers feed. Its Indiana Distillery processes corn, rye and barley into food grade alcohol, primarily beverage alcohol and distillers feed. Food grade alcohol consists of beverage alcohol and industrial food grade alcohol that are distilled to remove impurities. Food grade alcohol sold for beverage applications consists primarily of grain neutral spirits and gin, bourbon and corn and rye whiskey. It sells food-grade industrial alcohol for use as an ingredient in foods (such as vinegar and food flavorings), personal care products (such as hair sprays and hand sanitizers), cleaning solutions, biocides, insecticides, fungicides, pharmaceuticals, and a variety of other products. It sells food-grade industrial alcohol in tank truck or rail car quantities direct to a number of industrial processors.

The Company’s distillery co-products include distillers feed and fuel grade alcohol. Distillers feed is principally derived from the residue of corn from alcohol processing operations. Fuel grade alcohol is sold primarily for blending with gasoline to increase the octane and oxygen levels of the gasoline. As an octane enhancer, fuel grade alcohol can serve as a substitute for lead and petroleum-based octane enhancers.

The Company competes with Grain Processing Corporation, Iowa, Archer-Daniels-Midland Company, Illinois and Fortune Brands, Inc.

Ingredient Solutions

The Company’s ingredient solutions segment consists primarily of specialty wheat starches, specialty wheat proteins, commodity wheat starch and vital wheat gluten. The Specialty Wheat Starches constitutes the carbohydrate-bearing portion of wheat flour. It produces a pure white wheat starch powder by extracting the starch from the starch slurry. The ingredient solutions segment also includes Specialty Wheat Starches, Commodity Wheat Starch, Specialty Wheat Proteins, Vital Wheat Gluten.

The Company’s specialty wheat starches are used primarily for food applications as an additive in a range of food products to affect their nutritional profile, appearance, texture, tenderness, taste, palatability, cooking temperature, stability, viscosity, binding and freeze-thaw characteristics. Important physical properties contributed by wheat starch include whiteness, clean flavor, viscosity and texture. It also sells its specialty starches for a number of non-food applications, which include biopolymer products, and for use in the manufacture of adhesives, paper coatings, carbonless paper, and wall board. Specialty Wheat Starches include Fibersym Resistant Starch series, FiberRite RW Resistant Starch, Pregel Instant Starch series and Midsol Cook-up Starch series.

Commodity Wheat Starch has both food and non-food applications. The Company has developed a number of specialty wheat proteins for food and non-food applications. Specialty wheat proteins are derived from vital wheat gluten through a variety of processes which change its molecular structure. Wheat proteins for food applications include products in the Arise, Wheatex, HWG 2009 and FP series. The specialty wheat proteins include Arise series, Wheatex series, FP series and HWG 2009.

Vital wheat gluten is a free-flowing light tan powder which contains approximately 75% to 80% protein. It also derive vital wheat gluten. Vital wheat gluten is added by bakeries and food processors to baked goods, such as breads, and to pet foods, cereals, processed meats, fish and poultry to improve the nutritional content, texture, strength, shape and volume of the product. The cohesiveness and elasticity of the gluten enables the dough in wheat and other high protein breads to rise and to support added ingredients, such as whole cracked grains, raisins and fibers.

The Company competes with Cargill Incorporated, Corn Products International Incorporated, The Solae Company, Manildra Milling Corporation, Penford Corporation, Manildra Milling and Archer-Daniels-Midland Company.

Other Segment

The Company’s plant-based biopolymers and composite resins, which are produced from the further processing of certain of its wheat proteins and wheat starches (and other plant sources), can be used to produce a variety of eco-friendly products. Its principal products in its other segment consist of its MGPI Terratek biopolymers and composite resins. The MGPI Terratek SC starch-based biopolymers are its biopolymers. Applications include disposable eating utensils, golf tees, food and feed containers and similar type vessels, as well as non-degradable hard plastic-like products. It also produce MGPI Terratek WC wood-based composite resins, which can be used in the manufacture of decking materials, furniture parts, toys and a number of other wood-like products.

Company Address

MGP Ingredients Inc

1300 MAIN ST
ATCHISON   KS   66002-2666
P: +1913.3671480

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