WELLAND, ON, Feb. 9 /CNW/ - Lakeside Steel Inc. (TSX-V: LS) ("Lakeside Steel" or the "Company") today announced that its Board of Directors has recently approved a significant capital investment for the fiscal year ending March 31, 2011. The capital expansion plans include the construction of new facilities at the Welland, Ontario location of its wholly-owned subsidiary, Lakeside Steel Corporation ("Lakeside").
Lakeside will install a casing threading line to perform work that Lakeside currently outsources in Texas, Alberta and Ontario. Once operational, Lakeside will be able to end finish all products produced in its Welland facility. This process will move Lakeside up the value chain, significantly improve customer lead times and is expected to have a positive impact on the Company's margins.
In addition, Lakeside plans to engage an outside consulting firm to review the feasibility of the installation of a new slitting line to process the hot band steel used as raw material at its Welland operations. Lakeside currently contracts 100% of its slitting business to three Ontario-based processors. It is anticipated that the installation of an in-house slitting line would improve margins, reduce costs and provide improved flexibility in raw steel purchasing.
When fully operational, the new operations are expected to create up to an additional 40 jobs. The capital expansion plans contemplate expenditures of approximately $5 million and construction of the new facilities is expected to begin in August 2010.
Once completed, the new facilities, in conjunction with Lakeside's recently completed upsetting and threading line and rail yard, will improve the Company's upstream and downstream integration.
Ron Bedard, President and CEO of Lakeside, commented that "The capital expansion plans are another step in pursuit of opportunities to grow our business responsibly. We have an excellent work force and believe that our employees will do a very good job in these new facilities. In addition, we expect the new operations to have a positive impact on working capital, efficiency, margins and customer service. The Company has become stronger over the past year and our recent appointment as a TSX Venture 50 Company identifies Lakeside as an emerging leader."
Lakeside Steel is also pleased to announce that it has recently renewed its credit facility with CIT Business Credit Canada Inc. ("CIT"). Ken Hunter, Chief Financial Officer commented "Lakeside has a long standing and excellent relationship with CIT and appreciates their support and confidence in Lakeside through the economic downturn. We believe that the worst is behind us and that we have turned a corner. While the economic recovery will be long and slow, we believe Lakeside is in a good position to return to profitability."
About Lakeside Steel Inc.
Lakeside Steel is a 2010 TSX Venture Exchange 50 company and the parent company of Lakeside. Lakeside, located in Welland, Ontario, is a diversified steel pipe and tubing manufacturer. Lakeside's list of customers includes large oil and gas, mining, automotive and commercial and industrial supply companies. In addition to supplying its products in these industries, Lakeside manufactures pipe and mechanical tubing for the resale market, which is sold to distributors in Eastern Canada and the Northeastern United States. Lakeside manufactures a variety of products for these industries including oil well tubing and casing, mechanical tubing, pressure tubing, automotive tubing, hollows for redraw, line pipe, heating and plumbing pipe, drill rod and specialty tubing. Lakeside serves customers worldwide, either directly or indirectly, in Canada, Australia and the United States.
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(R) company in 2010. TSX Venture 50 is a trade-mark of TSX Inc. and is used under license.
SOURCE LAKESIDE STEEL INC.
For further information: For further information: Ron Bedard, President & Chief Operating Officer, Lakeside Steel Inc., (905) 735-7473 ext. 7294, Fax: (905) 735-8896, e-mail: firstname.lastname@example.org; Ken Hunter, Chief Financial Officer, Lakeside Steel Inc., (905) 735-7473 ext 7218, Fax: (905) 735-9069, e-mail: email@example.com