Lakeside Steel to build new end-finishing and heat treatment facility

WELLAND, ON, Feb. 28 /CNW/ - Lakeside Steel Inc. (TSX-V: LS) ("Lakeside Steel" or the "Company") a leading North American producer of OCTG casing and tubing, today announced that its Board of Directors has approved plans to build a new state of the art end-finishing and heat treatment facility.

The new facility will provide Lakeside Steel with vertical integration of finished and upgraded tubular products. The decision is also supported by the growing requirements for premium tubular solutions through the proliferation and growth of unconventional gas and oil development throughout North America.

The Company has placed orders for all of the critical equipment. The Company expects to start construction of the new operation in the next three months at a cost of approximately CDN $12 - $15 million, which includes working capital, and anticipates that it will supply commercial products by February 2012. The new plant will process tubing manufactured at the Company's facility in Welland, Ontario, for upsetting, heat treatment and threading. It will also provide threading for casing products to be manufactured at the Company's new casing facility currently being constructed in Thomasville, Alabama.

Once operational, the new end-finishing and heat treatment facility will create up to an additional 80 direct full-time jobs. The Company expects that the new facility will be built on a separate parcel of land as a stand-alone business. The Company is currently in advanced discussions regarding several potential locations and plans to announce the final location on or about March 15, 2011. The Company has sufficient financing and cash flow in place to fully fund this project.

The new plant will enable Lakeside Steel to produce high value-added American Petroleum Institute-certified J, L, N and P grades of OCTG products required throughout the majority of drilling operations in North America. 

Ron Bedard, President and Chief Operating Officer of the Company, commented, "This is another important step in Lakeside Steel providing higher value-added products to our current and future customers. This investment will provide certainty of supply to satisfy our customers supply chain needs. The project will also contribute to Lakeside Steel's bottom line profit. These assets, in addition to previous investments made by Lakeside Steel in both Canada and the U.S., provides the Company with some of the most modern, cost effective assets in the industry. Lakeside Steel is committed to growing our business responsibly both organically and through acquisitions". 

About Lakeside Steel Inc.

Lakeside Steel is a 2011 TSX Venture Exchange 50 company and the parent company of Lakeside Steel Corporation ("Lakeside").  Lakeside, located in Welland, Ontario, is a diversified steel pipe and tubing manufacturer with a focus on manufacturing and upgrading Oil Country Tubular Goods. Lakeside's list of customers includes large oil and gas end users as well as distributors across North America.

Lakeside Steel also indirectly wholly-owns Lakeside Steel Alabama which will be a diversified steel pipe manufacturer strategically situated in the southern United States on successful completion of the construction of the new facility in Thomasville, Alabama. Construction of the Alabama facility is currently underway.

This press release may contain forward-looking statements with respect to the Company, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as "may", "will", "expect", "estimate", "anticipate", intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of the Company discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the Management's Discussion and Analysis and Filing Statement of the Company which are available at www.sedar.com. The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on their behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the Company has no obligation to update such statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Lakeside Steel was recognized as a TSX Venture 50® company in 2010 and 2011. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.

SOURCE Lakeside Steel Inc.

For further information:

Ron Bedard
President and Chief Operating Officer
Lakeside Steel Inc.
FAX:  (905)735-9069
e-mail: ron.bedard@lakesidesteelcorp.ca
Ken Hunter
Chief Financial Officer
Lakeside Steel Inc
FAX:  (905)735-9069
e-mail: ken.hunter@lakesidesteelcorp.ca

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Lakeside Steel Inc.

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