MGPI targets energy costs

Related tags Kyoto protocol Emissions trading

US-based processor MGP Ingredients has initiated two
energy-efficiency projects as part of its overall programme to
achieve significant cost savings across its operations.

This strategy comes in response to both growing customer demand for distillers feed and also rising energy costs - a 4.2 per cent rise in energy costs in October alone accounted for over half of the overall rise in the US Consumer Price Index (CPI), according to the US labour department.

The company is carrying out the first scheme at its distillery operations in Pekin, US. This $1.8 million project is in addition to a previously announced $3 million energy-savings project that is already underway at the Pekin distillery and which is slated for completion by mid 2005.

According to Randy Schrick, vice president of manufacturing and engineering, the new project at Pekin should help to lower the amount of energy that is currently required for producing our mix of fuel grade and food grade alcohol.

"This is in line with our strategy of being the most efficient producer of high quality alcohol products,"​ he said.

The firm is also currently investing an additional $1.8 million in new equipment at its Atchison, US plant in order to reduce the flow of residual starch material from the company's wheat starch processing operations to its waste water treatment facility. Schrick claims that the Atchison project will not only pay for itself in lower waste water treatment costs, but will also increase our potential for increasing additional specialty starch products.

Distillers feed is the principal by-product of the alcohol production process and represents the final leg in the company's integrated manufacturing operations. Installation of the new feed processing equipment in Atchison is expected to be completed by mid 2005, while the distillery project in Pekin is scheduled for completion by spring, 2005.

"Customer demand for this ingredient is unprecedented and beyond our existing production capabilities, thus prompting our decision to proceed with this new expansion,"​ said Ladd Seaberg, president and chief executive officer.

Both these schemes form part of the company's $14 million capital expenditure programme, which was unveiled earlier this year.

According to Seaberg, up to $9 million of the approved capital will be used to install new equipment for processing distillers feed at the company's Atchison distillery.

"Furthermore, the new distillers feed equipment in Atchison will include new, state-of-the-art emission control technology that will enable us to stay in step with government environmental standards,"​ he said.

"The new starch expansion project will greatly boost our ability to address immense market interest in our FiberStar 70 resistant wheat starch for use as a highly effective fibre enhancer in many food applications, including low-carbohydrate formulations."

There is growing pressure on processors and manufacturers to cut down on both emissions and waste. The rise in raw material and energy prices means that firms have to look at every aspect of the supply chain to identify where possible cost savings can be made.

In addition, there is growing legislative pressure. In Europe, the EU Emissions Trading Scheme (EU ETS) is just one of the policies being introduced across Europe to tackle emissions of carbon dioxide and other greenhouse gases and combat the serious threat of climate change. The scheme comes into force on 1 January 2005.

The environmental regulator has cautioned food and drink manufacturers that if they fail to comply with essential environmental legislation they risk hefty fines.

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