The Atchison, Kansas-based company is spending $2.5 million on a new 19,600 square foot technical center in downtown Atchison, and $2.2 on an office building. Both buildings are expected to be completed by early 2007.
President and CEO Ladd Seaberg said: "As our business has grown, our existing R&D and office facilities have become inadequate.
"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."
Founded in 1942, MGP develops and produces specialty wheat protein and wheat starches for food and non-food applications.
In the food sector, its ingredients are used to enhance functionality, nutritional profile, taste and texture in baked and processed foods. Non-food areas of the business extend into personal care, pet food, biodegradable resins, and alcohol - both consumer and fuel grade.
Executive VP of marketing and sales Michael Trautschold said that the health and wellness trends in foods bode well for the company.
"Consumer desire for more healthful food alternatives continues to contribute to food processors' interest in wheat-based proteins and starches," he said. "In particular, 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."
The company believes that the opportunities for high protein and high fiber foods are significant even in the post low-carb era.
Going forward, it plans to strengthen its balance sheet by implementing a number of measures, including producing more specialty food ingredients from existing capacity and ploughing profits back into the business. This could result in future expansion of ingredient capacity, subject to demand.
MGP Ingredient's sales for the fiscal year ended June 30 were $275 million, of which $43.9 million was from speciality food ingredients. Cash from operations was $21.8 million.