MGP Ingredients has recently announced that it will be closing its distillery located in Atchison, Kansas by January 2024. This closure is part of the company’s strategy to improve profitability within its distilling business.
The Atchison distillery currently produces grain neutral spirits and industrial alcohol products. However, MGP Ingredients believes that the closure will help optimize margins and ultimately contribute to its overall financial goals.
According to a regulatory filing, the closure is estimated to result in one-time expenses ranging from $23 million to $31 million. The majority of these costs are attributed to restructuring expenses related to assets. Despite the expected decrease in net sales in the upcoming year, MGP Ingredients remains confident that this strategic move will be beneficial in the long run.
Additionally, the company plans to invest approximately $4 million to $6 million to separate the distillery from another facility in Atchison. This indicates their commitment to maintaining operations for their ingredient solutions business in Atchison, as well as their existing distillery in Lawrenceburg, Indiana.
Overall, MGP Ingredients aims to enhance its profitability within the distilling sector by streamlining its operations and focusing on key growth areas.