WELLAND, ON, July 29 /CNW/ - Lakeside Steel Inc. (TSX-V: LS) ("Lakeside" or the "Company") today announced plans to build a new manufacturing facility in Thomasville, Alabama. Once fully operational, the new facility is expected to add 192,000 tons of capacity, approximately doubling the Company's total production capacity and creating sufficient new capacity on OCTG casing products to satisfy the growing demand Lakeside has from its American customers, the majority of whom are located in the southern United States. The project is expected to be financed through a combination of equity and debt.
The total cost of the expansion project is estimated to be $40 million comprised of $22 million for plant and equipment and $18 million for inventory and working capital. The facility will create up to 120 new jobs in Thomasville. In addition to this major expansion project, Lakeside continues to invest in its existing facility in Welland. The company has invested $9.5 million in capital improvements over the past three years and is committed to spending a further $6 million during the balance of Fiscal 2011. Lakeside currently possesses some of the most efficient tubing assets in North America at the Welland facility, producing some of the highest quality products available in the market. The new facility in Alabama will augment those assets to provide some of the newest and most efficient casing assets in the industry today with an equal quality standard in place.
Thomasville, Alabama was chosen because of its proximity to both raw material suppliers and customers. Lakeside believes strongly that Alabama provides the right environment in which to operate a manufacturing business and Thomasville specifically will be conducive to a productive and profitable operation for years to come. The City of Thomasville is located 100 miles north of Mobile, Alabama, and is 600 miles east of Houston, Texas. Once completed, the new facility will be the largest industrial employer in the City of Thomasville. This expansion project remains subject to the entering into of definitive agreements.
Mill equipment, a substantial part of the total project cost, is being sourced from Freedom Machinery Company Inc. based in Toledo, Ohio. Freedom Machinery is a worldwide buyer and supplier of quality tube & pipe mill equipment. Their staff has industry experience exceeding 60 years.
The Company expects to start construction on the Thomasville expansion project in the fall, 2010 and plans to be producing pipe for the OCTG and line pipe market by December of 2011.
Chris Roik, Lakeside's senior most experienced operations manager in Welland, Ontario, has been appointed Vice President and General Manager of the new facility in Alabama and will commence his responsibilities for this project immediately.
About Lakeside Steel Inc.
Lakeside Steel is a 2010 TSX Venture Exchange 50 company and the parent company of Lakeside Steel Corp. ("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 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.
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