Milling & Baking News - May 11, 2004 - 12

B U S I N E S S

Bartlett expanding in grain with
K.C. terminal elevator acquisition
KANSAS CITY - Bartlett Grain Company L.P. has emerged as the top bidder in
an auction for a large Kansas City terminal grain elevator. The Bartlett purchase
of the Farmland Industries elevator was
approved May 4 by U.S. Bankruptcy
Judge Jerry Venters.
The elevator, located in the Fairfax district of Kansas City, Kas., has 10,047,000
bus of grain storage capacity and is
served by several rail carriers, including
the Burlington Northern and Santa Fe
and Norfolk Southern. The elevator also

handles trucks and barges.
According to Bartlett, the Farmland
elevator currently is being operated by
Decatur, Ill.-based Archer Daniels Midland Co. If the transaction is completed,
Bartlett would operate the elevator by
July 1, the company said.
The elevator is located only a few miles
from another 10-million bu terminal
elevator operated by Bartlett. The latter
facility, the River Rail Elevator, is leased
by Bartlett from the city of Kansas City.
The purchase agreement was the sec-

Kellogg contemplates closing plant,
consolidating Worthington business
BATTLE CREEK, MICH. - Kellogg Co. has
announced it may close its Worthington,
Ohio, plant and merge the plant's vegetarian foods production into the company's
plant in Zanesville, Ohio.
The decision remains subject to negotiations with the United Industrial Workers
Union, which represents hourly employes
at the facility in Worthington, a northern
suburb of Columbus.
Kellogg purchased the facility in 1999
when it bought Worthington Foods, Inc.,
which at the time had about $120 million
in annual revenue. The company employs
about 300 people at the plant, which makes
Morningstar Farms, Worthington, Loma
Linda and other vegetarian food brands.
Because it cannot efficiently expand the
Worthington facility, Kellogg said it may
need to consolidate operations at its plant in
Zanesville, about 55 miles east of Columbus,
in order to improve operations and take advantage of growth opportunities. The Zanesville facility also makes vegetarian products.
"We are committed to investing in this

business and its brands and believe that we
can do so more effectively by consolidating manufacturing operations in one location," said Anthony Palmer, president of
Kellogg's natural and frozen foods division.
"The Zanesville location provides sufficient
space for this consolidation and for future
expansion that we may require."
Kellogg employs about 150 people at the
Zanesville facility. The company has not determined how combining operations of the
two plants would affect employment, but if
it happens, it would take place in phases,
with completion scheduled by mid-2005.
Such a move, though, would continue
Kellogg's recent streamlining of operations for greater efficiency as it focuses on
its Volume to Value strategy. That strategy
has helped boost the company's profitability even amid mixed sales results in the
company's main product lines.
The company's category sales performances have deteriorated so far in 2004, even as its
overall revenue and earnings in the first quarter surged 11% and 34%, respectively.

Kerry Group completes $440-million purchase
of Quest Food Ingredients from ICI Group
TRALEE, IRELAND - Kerry Group P.L.C.
has completed the purchase of Quest Food
Ingredients from London-based
ICI Group for $440 million. The
transaction first was announced
in March (see Milling & Baking
News of March 9, Page 12).
Kerry said Quest Food will be merged
into a new Kerry Bio-Science division within Kerry Group.
With annual sales of $255 million, Quest
Food sells ingredients to snack, bakery,
dairy, confectionery and pharmaceutical
markets worldwide. The company's 2003
12 / Milling & Baking News, May 11, 2004

EBITDA was $37 million, and the assets
being acquired have been valued at $150
million. Kerry said it will finance
the acquisition through existing
lines of credit.
North American markets accounted for 38% of Quest Food
Ingredient sales in 2003. European sales
accounted for 40% of sales; Asia Pacific,
10%; and rest of world, 12%.
The ICI Group said it will use proceeds
from the sale - expected to be about $365
million after taxes and other costs - to reduce indebtedness. MBN

ond significant move for Bartlett in the
Kansas City grain market in recent weeks.
In April, the company agreed to lease the
K.C.T. elevator in Kansas City, Mo., from
Hyline Marketing L.L.C. The elevator
has 4.3 million bus of storage capacity. It
too is served by several rail carriers, has
truck loading/unloading capacity and is
located on the Missouri river.
Under the long-term lease, Bartlett
will begin operating the K.C.T. elevator
no later than June 1. The facility previously had been leased to CHS, Inc.
According to Bartlett, modest upgrades are planned for the two elevators,
but both facilities were described as "in
good condition." MBN

In the 13 weeks ended April 17, the
company's dollar sales in ready-to-eat cereal fell 2.2%, compared with a 1.8% decline
in the 52 weeks ended that date, according
to ACNielsen data of measured channels.
The company's sales of toaster pastries and
crackers fell 2.4% and 6.6%, respectively, in
the 13-week period, compared with declines
of 2.1% and 1.8% in the 52-week period.
The data showed that the company's
cookie business continued struggling, with
a 16.5% decline in the 13-week period compared with a 12.9% decline in the 52-week
time frame. Sales of breakfast and granola
bars, which grew 8.7% in the 52-week period, fell 0.1% in the 13-week period.
Kellogg's frozen waffle and pancakes
segment helped pick up the slack, though,
with dollar sales rising 6.5% in the 13-week
period, compared with a 2.7% increase in
the 52-week period. MBN

ACH completes
purchase of Unilever
oil brands in Mexico
MEMPHIS - ACH Food Companies,
Inc., a subsidiary of Associated British
Foods P.L.C., last week completed its
$110-million purchase of Unilever's
food oils and fats brands in Mexico.
The transaction was first announced
in March (see Milling & Baking News of
March 16, Page 12).
The acquisition brings into ACH's
fold brands that generated $124 million in sales in 2003. The brands include Mazola, a leader in the corn oil
market in Mexico; Inca, the country's
dominant shortening brand; and Capullo, the Mexican market's leading
premium canola oil brand.
ACH, which makes Karo corn syrups
and Argo corn starch, acquired Mazola's
U.S. rights from Unilever in 2002. MBN

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Milling & Baking News - May 11, 2004

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