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October 17, 2013

N.Y. firm buys Fibred, wastewater facility

Potential expansion of production being planned

CUMBERLAND — International Fiber Corp. of North Tonawanda, N.Y., has purchased Fibred and its wastewater treatment facility, Mexico Farms LLC. International Fiber Corp. was itself recently acquired by Arsenal Capital Partners.

No major changes are expected to the operation in Mexico Farms in the short term, said Ken Blackburn, IFC’s president and CEO, on Thursday. Good news is likely for the future, Blackburn said.

About a year from now, the company will make a major investment in the wastewater treatment system for Fibred and “start to ramp up” at Fibred, Blackburn said. Over two years, the plan is to increase production at Fibred to seven days a week and add employees. Fibred fits in nicely for IFC, which produces many food-based fibers.

“IFC produces a wide range of fibers ... but did not have a soy product, and soy is the premium product. That’s why it fits in nicely,” said Blackburn.

Mexico Farms LLC, has been involved in bankruptcy proceedings and recently resolved pollution complaints with state regulators. Fibred was not directly involved in the bankruptcy proceedings.

On Aug. 27, International Fiber was purchased by Arsenal Capital Partners, a New York-based private equity firm that invests in middle-market specialty industrial and health care companies, according to a company news release. International Fiber Corp. is the leading supplier of cellulose‐based insoluble fiber products for food and industrial uses around the world.

“We’re excited to add to IFC’s lead market offering, and know our customers will benefit from our ability to serve a larger variety of their fiber needs. Fibred’s product and processes enhance the usability of fiber in food with best-in-class consistency, neutral taste ... in formulation, in addition, to the functional and health benefits of insoluble fiber,” said Blackburn.

“The acquisition of Fibred is part of our plan to significantly expand IFC’s presence both in North America and internationally. We plan to continue to support the growth of IFC with acquisitions as well as new product offerings to make it a more valuable supplier to the industries that we serve,” said Sal Gagliardo, an operating partner at Arsenal.

The planned sale of the two local companies was revealed after Margaret L. Ort of Mexico Farms LLC, in an undated letter to County Attorney William Rudd, asked the county to release an option to purchase water treatment lagoons from Mexico Farms LLC. Commissioners voted earlier this month to release the option, removing a potential complication from the planned change of hands.

Fibred was founded by the late Lewis J. Ort, who transformed a family bakery into a nationwide operation. Ort knew dietary fiber could improve health and began the Fibred Co. as a way to provide food-grade fiber.

The two companies employ about 35 people, with a payroll of more than $1.7 million. The company also covers employees’ health insurance deductibles and pays about 70 percent of health insurance costs. The Fibred company has sales in the U.S. of more than $7 million annually, Casper Taylor Jr., a representative of the company, has said.

The wastewater treatment facilities have been a pollution issue recently resolved by a consent agreement between the state and Mexico Farms LLC. Mexico Farms processes wastewater for Fibred, a soybean processing and manufacturing operation. Fibred was not targeted in the Maryland Department of the Environment actions against Mexico Farms, resolved over the summer.

“The estimated cost of compliance is several million dollars,” Ort said.

The dispute centered around allegations that Mexico Farms was dumping wastewater without a permit and continuing a series of environmental violations. The state had filed in Allegany County Circuit Court on July 19 for an injunction.

A new treatment plant is to be operational by March 30, 2015, according to the agreement. The lagoons will cease operations and be cleaned out during 2014-15, according to the language of the decree. Mexico Farms agreed to provide monthly progress reports to MDE.

IFC has plants in North Tonawanda, Urbana and Oberlin, Ohio, Nitro, W.Va., and Temse, Belgium.

Matthew Bieniek can be contacted at mbieniek@times-news.com.

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