Milling & Baking News - September 28, 2004 - (Page 1)

Theinewsweeklyiofigrain-basedifoods N E W S F E AT U R E Abenante sees cause for industry optimism / SEPTEMBER 28, 2004 I.B.C. in Chapter 11 bankruptcy; new chief executive named KANSAS CITY - Unable to overcome a multitude of financial and operational difficulties, Interstate Bakeries Corp. early Sept. 22 filed for protection from its creditors under Chapter 11 of the Bankruptcy Code. The bankruptcy is the largest in the history of the U.S. commercial baking industry. Concurrent with the bankruptcy filing, I.B.C. said it has secured financing so that it will be able to continue operating during its reorganization and also announced that its chief executive officer has resigned. I.B.C. said it has received a commitment for $200 million in debtor-in-possession financing from JPMorgan Chase Bank to fund post-petition operating expenses and supplier and employe obligations. On Sept. 23, the company received bankruptcy court approval to draw $50 million from the commitment. A debtor in possession is a company that operates through Chapter 11 bankruptcy proceedings. Separately, I.B.C. announced that James R. Elsesser has resigned as chairman and Continued on Page 14 Earnings off 19% at General Mills after restructuring, other costs Story on Page 23 Faga, Adams decry disapproving tone toward enriched grains WASHINGTON - To the average American, the term "whole grains" conjures images of wheat or corn kernels, not finely ground milled products, said Elizabeth A. (Betsy) Faga, president, North American Millers' Association. In Sept. 21 testimony regarding the Dietary Guidelines Advisory Committee Report, Ms. Faga spoke before representatives of the U.S. Department of Agriculture and the Department of Health and Human Services. Ms. Faga expressed concern over a tendency for advocates of whole-grain products to disparage enriched grain products. Also testifying was Judi Adams, president Continued on Page 28 MINNEAPOLIS - Significant increases in commodity and other input costs, as well as costs related to restructuring actions, contributed to a 19% decline in earnings at General Mills, Inc. in the first quarter ended Aug. 29. Net income of General Mills in the first quarter was $183 million, equal to 48c per share on the common stock, compared with $227 million, or 61c per share, in the first quarter of fiscal 2004. Net sales LATE increased 3% to $2,590 million. The first-quarter results included restructuring and other exit costs of $40 million, consisting of $38 million of charges related to first-quarter supply chain initiatives to further increase asset utilization and reduce manufacturing and sourcing costs, and $2 million in charges related to restructuring actions previously announced. The supply chain actions, which affected Continued on Page 20 NEWS LONDON - Associated British Foods P.L.C. last week said that George Weston will become chief executive officer of the company following the retirement of Peter Jackson in April 2005. Mr. Weston, 40, joined A.B.F. in 1988 and currently is c.e.o. of George Weston Foods, A.B.F.'s Australian subsidiary. Mr. Weston was in charge of George Weston Foods' milling operations in Victoria, Australia, from 1989 to 1990, and was managing director of Westmill Foods from 1992 to 1998, after which he worked for the group finance director until joining Allied Bakeries, where Continued on Page 8 Weston to top spot at A.B.F. inside THIS WEEK Ingredient Interview of new Interstate chief executive Battle over Archway cookie production 9 16 ConAgra Foods unit shows profit gain Week 21 30

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Milling & Baking News - September 28, 2004