BELLEVUE, Wash., Feb. 19, 2002

Penford Builds New Food-Grade Production Capability in Cedar Rapids, Iowa

Penford Corporation (Nasdaq: PENX) today announced that it has begun constructing new production capacity in Cedar Rapids, Iowa, that will be dedicated to manufacturing proprietary corn-based food ingredients and ingredient systems. The facility in Cedar Rapids currently manufactures specialty starch-based ingredient systems solely for industrial applications, including papermaking and textiles. The project is scheduled to be completed in the spring of 2002. The cost of the project was not disclosed.

"This project accomplishes several strategic objectives for Penford. First, it gives us our initial capability to produce specialty food-grade corn ingredients in North America," said Thomas D. Malkoski, chief executive officer of Penford Corporation. "It also frees up much-needed capacity in our Australian operation and allows Penford to optimize production of our food-grade corn product portfolio in North America, Australia and Asia. And lastly, it will add to the overall efficiency and flexibility of our Cedar Rapids facility."

"By adding high-value food-grade corn ingredient capacity in North America, we will further enhance Penford's position as a market leader in delivering technically-differentiated, specialty ingredients to our customers in the food and paper industries," Malkoski said.

About Penford Corporation
Penford Corporation develops, manufactures and markets specialty natural-based ingredient systems for various applications, including papermaking, textiles and food products.

This press release contains forward-looking statements concerning the Company's future performance and the prospects for the continuation of current performance trends in fiscal 2002. There are a variety of factors which could cause actual events to differ materially from those projected in the forward-looking statements such as delays or difficulties in completion of the project, cost over runs, failure of the project to operate as projected, lack of customer demand or orders, increased competition, decreases in market share, unfavorable changes in product mix, disappointments in product development efforts, interest rate and energy cost volatility, foreign exchange rate fluctuations and those listed in the Company's SEC reports, including the report on Form 10-K for the year ended August 31, 2001.