November 24, 2009 (FinancialWire) — MGP Ingredients, Inc. (NASDAQ: MGPI) has entered into a joint venture agreement with SEACOR Energy, Inc.’s affiliate, Illinois Corn Processing Holdings, Inc., to reactivate distillery operations at MGPI’s facility in Pekin, Illinois. The facility will be owned and operated by a separate entity called Illinois Corn Processing, LLC and initially will be dedicated to the production of alcohol for beverage, industrial and fuel applications. Production is expected to begin in the near future.

Beverage and food grade industrial alcohol produced by the joint venture enterprise will be marketed by MGPI. The facility’s fuel grade alcohol, or ethanol as it is commonly known, will be marketed by SEACOR Energy, a subsidiary of SEACOR Holdings, Inc. (NYSE: CKH), Fort Lauderdale, Fla.

SEACOR Energy paid MGPI $15 million for a 50 percent ownership interest in Illinois Corn Processing, LLC. Additional capitalization will be provided to the joint venture by an affiliate of SEACOR Energy through a term loan and revolving loan secured by the facility. MGPI and SEACOR Energy have agreed to a profit sharing arrangement related to the manufacturing, marketing and sales of the various alcohol products. MGPI will recognize charges of approximately $2.3 million in the second quarter of the company’s current fiscal year related to the formation of the joint venture.

The facility will employ former MGPI personnel who were laid off this past February when the company made the decision to temporarily discontinue distillery operations at the Pekin location. Up to 60 individuals, consisting of plant, administrative and management personnel, are expected to operate the facility when it is up to full speed.

MGPI purchased the Pekin facility from the former American Distilling company in 1980. Since then, the facility has undergone extensive upgrades and for many years had also been utilized for the production of commodity wheat starch and commodity vital wheat gluten, the basic protein component of wheat flour. In November 2008, MGPI ceased starch and protein production in Pekin, concentrating its focus on the manufacturing of specialty, value-added starches and proteins at its Atchison, Kan., facility. The company has no plans to resume starch and protein production in Pekin either through its own accord or through the new joint venture with SEACOR Energy.

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