Ingredion Completes Reorganization

In its recent Q1 2024 Earnings Call, Ingredion delivered the news that it has completed its reorganization, sold its South Korean business and shared more results for the quarter.

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Ingredion completed the sale of its business in South Korea to an affiliate of the Sajo Group, a Seoul-based food company. The transaction, announced in November, amounts to approximately $294 million.

At the time of the announcement in early February, Ingredion President / CEO Jim Zallie said, "The sale of our business in South Korea is an important step for Ingredion as we reshape our portfolio to unlock value and redeploy assets to create value for shareholders." This was part of the business transformation journey that Zallie said will further strengthen the company's focus on growth and support its long-term vision.

The business operations reorganization was announced last November, and its intend is to focus the company's production assets and commercial efforts to better serve customers at both the global and local level. The company had been organized by regions.

Going forward, Ingredion intends to serve customers with a global focus on texture and healthful solutions and will continue to provide food and industrial ingredients to local markets. The company expected this reorganization would result in a change to its financial reporting segments in Q1 2024.

“Against a strong comparison with last year's record first quarter performance, this quarter’s results exceeded expectations. As anticipated, our net sales volumes in the quarter improved sequentially, despite the impact of extreme cold weather on shipments in the US and taking into account the sale of our South Korea business,” said Jim Zallie, Ingredion president and CEO, in its 1Q 2024 call. “Furthermore, we maintained our gross margins above 22% as the strength of our business model effectively managed the impact of variable rate contracts which require the pass through of lower corn costs.”

“Looking forward, our Driving Growth Roadmap continues to guide our long-term value creation. Also, in support of our new Winning Aspiration, the reorganization is enabling clearer focus on the opportunities presented by our global customers to drive growth. We are encouraged by the levels of customer engagement, particularly in our texture solutions business. Additionally, we anticipate deploying cash this year toward organic investments, dividends, and a step-up in share repurchases."

Another change was to its leadership. Dr. Michael Leonard was appointed to the role of senior vice president, chief innovation officer, and head of protein fortification, effective May 13, 2024. Leonard is coming from MycoTechnology, where he serves as the chief executive officer, leading the food technology startup company’s transformation and global expansion of new protein and bioactive technology platforms for the specialty food ingredient industry.

With his experience leading product development and commercialization across multiple food and beverage categories in domestic and global markets, this was likely to help the Ingredion restructure.