The Board of Directors of Midwest Grain Products, Inc. (Nasdaq: MWGP – news) yesterday declared an annual dividend of 10 cents per share on the company’s common stock. The dividend is payable Nov. 8, 2000 to stockholders of record Oct. 12, 2000. Directors also approved plans for the construction of a new facility to increase production capacity for the company’s Wheatex(TM), a unique line of specialty wheat proteins used in meat extensions and vegetarian meat-like products.
In announcing the dividend, Board Chairman Cloud L. “Bud” Cray said, “Our company’s substantial earnings improvement in fiscal 2000 and confidence in management’s growth strategies going forward support the board’s decision to approve this dividend.” As previously announced, the company ended fiscal 2000 on June 30 with net income of $4,890,000, a nearly four-fold increase over the prior year’s net income of $1,270,000. The last time Midwest Grain paid a dividend on its common stock was shortly after the end of the company’s 1995 fiscal year. The dividend at that time was paid on a quarterly basis at an annual rate of 50 cents per share.
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“The environment in our major markets has changed considerably since then, particularly in the U.S. wheat gluten market which, compared to pre-1995 conditions, has been subject to extreme competitive pressures from subsidized European Union producers,” said Ladd Seaberg, president and CEO. “As a result, our strategies and mission have undergone a significant transformation, with much greater focus being placed on the development, production and marketing of value-added wheat-based ingredients.”
Seaberg said the new Wheatex facility “aligns perfectly” with the company’s strategies and re-positioning in the marketplace. “Customer demand in markets served by Wheatex has grown steadily since we began intensely marketing our specialty wheat proteins in 1997,” said Seaberg. “This plant will allow us to continue to meet the needs of the marketplace, and to further increase the amount of our total value-added sales relative to our commodity products.”
Construction on the 22,500 square foot facility is expected to begin in December. Designed to produce up to 20 million pounds of Wheatex annually, the new plant will be added to the company’s existing Atchison facility. The cost of construction will be approximately $6 million.
“The construction of a new plant for our Wheatex products is very exciting,” said Ed Trompeter, Midwest Grain’s corporate director of gluten and starch production. “From a market standpoint, it will allow us to better serve customers who use textured proteins, and it also will free up capacity in our existing facilities for the production of some of our other value-added ingredients.”
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By GlobalDataWheatex(TM) is a specialty wheat protein that goes through an extrusion process to produce particles ranging in size from small flakes to large chunks. It is used primarily as an extender in a variety of meat products and as a meat substitute for vegetarian applications.
Steve Ham, marketing and sales director for the company’s specialty ingredients, sees a great future for Wheatex. “A majority of today’s consumers have a time-precious lifestyle and a desire for a healthier diet,” said Ham. “Wheatex is high in protein and low in fat. It’s excellent for producing numerous meat and meat-like products, including chicken nuggets, chicken and beef patties, shredded beef and pork, sausages and crab cakes.”
The unique textural qualities of Wheatex take on a meat-like appearance when hydrated. Because of the product’s neutral flavor profile, a minimal amount of flavorings or seasonings are required to achieve the desired taste of the end product. “This translates to added cost savings for our customers,” Ham said.
In business for more than half a century, Midwest Grain Products, Inc. is a recognized pioneer in the development and production of natural grain-based products. The company has facilities in Atchison, Kan., and Pekin, Ill., that utilize the latest technologies to assure high quality products and to maintain efficient production and service capabilities.
