LifeLine gets SQF certification, aiding its restructuring plans
LifeLine Foods Inc. has received the Safe Quality Food program certification, giving it a boost as it moves forward following a financial restructuring. The St. Joseph, Mo.-based 50 MMgy ethanol producer also manufactures a line of food-quality corn products such as flour, meal and grits.
The SQF certification, requires a rigorous and validated food safety management system, and signifies to the company’s food processing customers that it complies with key industry-recognized food safety standards. “We’ve worked long and hard to attain this certification”, said Robin Venn, LifeLine Foods’ CEO. “Having SQF allows LifeLine Foods to have access to markets previously unavailable to us. There are food producers who insist their suppliers have this certification and we now do.”
Venn also said the food processing industry is tremendously competitive and having the SQF certification will separate LifeLine foods from companies who have not earned it. SQF is a division of the Food Marketing Institute.
LifeLine Foods is one of the largest processors of corn meal, corn flour, snack meal, and brewer’s grits. The company provides processed corn products to several of the country’s largest food producers. Venn added, “LifeLine Foods is in a growth period. The SQF certification will enable us to grow more efficiently and be a major player in the industry.”
The SQF certification came on the heels of a financial restructuring for the company that will provide new working capital, pay down debt and finance facility upgrades.
“In addition to strengthening our financial health, the mill upgrade will be transformative for our business,” said Jay Lang, chief financial officer. “We received great support from our two equity holders, ICM and Agramarke Quality Grains.”
“ICM (a Colwich, Kansas-based renewable fuels design and build firm) is committed to the innovative food and renewable fuel processes LifeLine has created and to growing its market presence,” said ICM president Dave VanderGriend.
“Since AgraMarke purchased the former Quaker Oats facility in 2001, LifeLine has added value for all area producers by strengthening local demand for corn and allowing our members to become vertically integrated in food and fuel production,” said John Howard, vice chairman of AgraMarke Quality Grains and Hiawatha, Kan., corn producer. Agramarke Quality Grains is a Missouri corn cooperative consisting of over 600 area producers.
“LifeLine Foods must become a food-first business. With the upgraded mill, we can double the conversion of corn to food,” said Venn. “LifeLine selected Buhler Inc., the world’s most technologically advanced milling company, for engineering and world class equipment.”
In the restructuring, LifeLine raised $25 million through the sale of preferred stock, and established a $20 million revolving credit facility with Wells Fargo Capital Finance NA. Also, $26.5 million in Chapter 100 Bonds were issued with the support of the St. Joseph Economic Development Partnership. This program provides partial property tax abatement on the new investment through 2014. The bonds were issued through the city of St. Joseph, in cooperation with other taxing jurisdictions, including Buchanan County and St. Joseph School District.
“The St. Joseph Economic Development Partnership recognizes the importance of continued investment and job growth in area businesses," said Brad Lau, St. Joseph Metro Chamber Director of Business Development. "The Chapter 100 program encourages companies like LifeLine to invest in local facilities.”
LifeLine’s management team developed a turnaround plan that ensures LifeLine Foods is an industry leader in the food, fuel, and feed markets, the company said in announcing more details of the restructuring. “This capital investment enables the company to grow the more-profitable food business and flexibility to capitalize on ethanol markets when conditions are favorable,” Venn concluded.