At a time when raw material prices - particularly for wheat - continue to squeeze margins, sales of speciality ingredients - primarily wheat proteins and wheat starches - at the US-based firm are neatly counteracting a decline in sales of commodity ingredients, such as wheat gluten and commodity wheat starch.
Yesterday the company told the market that on the back of strong demand for its speciality wheat ingredients, earnings for the year would be higher than previously estimated. The news sent its shares on NASDAQ up nearly 12 per cent.
Growth is underway for the manufacturer of wheat based ingredients with the company confirming yesterday that its board had cleared nearly $1million ($900,000) in spending to boost speciality wheat starch production capacity at its Atchison, Kansas plant.
The spending is part of a wider $2 million plan to boost wheat starch and wheat protein production, first announced in December.
Last year the company expanded this plant for the production of speciality wheat proteins for bakery, pasta and noodle markets.
"Our growth strategy is focused on building our speciality products by concentrating our manufacturing, research and development, and marketing activities on this area," said Ladd Seaberg, CEO of MGP Ingredients. "Since adopting this strategy in recent years, our efforts have resulted in steady progress which has now begun to move at a more accelerated and profitable pace."
In November the company reported a 33 per cent rise in sales for the first quarter of fiscal 2004 to reach $57 million, up from $42 million for the same period a year ago.