TSX Venture Exchange
EDMONTON, Jan. 10 /CNW/ - Bri-Chem Corp. ("Bri-Chem") (TSX Venture Exchange: BRY) a leading Canadian wholesale distributor of oil & gas drilling fluids,
steel pipe and piping products is pleased to announce that it has
ratified an agreement with Wuxi Huayou Special Steel Co., Ltd, ("Wuxi")
of the People's Republic of China, to jointly establish a new operating
company, Bri-Steel Manufacturing Inc. ("Bri-Steel"), that will provide
value-added manufacturing of large diameter seamless steel pipe located
in Edmonton, AB, Canada.
Terms of the arrangement have Bri-Chem owning 70% of the voting common
shares of Bri-Steel and Wuxi owning 30%. Bri-Chem has agreed to
advance approximately $1 million of working capital and support initial
inventory financing as required and provide Bri-Steel with sales and
marketing personnel. Wuxi will contribute all the necessary equipment,
training, installation and engineering. The equipment contribution by
Wuxi will be in exchange for $2.1 million non-voting preferred shares
that will be issued to Wuxi.
The manufactured pipe will range in outside diameter from 14" to 36" and
will be manufactured from carbon steel using a Thermal Pipe Expansion
(TPE) process that heats the steel tubes while being pushed by a
horizontal hydraulic press over a mandrel, thereby expanding the pipe.
The steel pipe is then finished by lacquering and stenciling and is put
through a series of tests to ensure it meets industry specifications.
The TPE process has been utilized for producing large diameter steel
pipe for several years in China and Bri-Steel will be the first to
introduce TPE production and testing in North America. The Edmonton
operation is expected to be in the commissioning phase starting in
February 2011 with light production beginning in April 2011.
It is also agreed that, at any time after Wuxi has been repaid their
initial capital contribution of $2.1 million by way of redemption of
their preferred shares in Bri-Steel, Bri-Chem has the option to acquire
all of Wuxi's shares held in Bri-Steel at a purchase price equal to two
(2) times the initial capital contributed by Wuxi.
Bri-Chem is a wholesale distributor of drilling fluids and steel
products and services to the oil & gas and construction industries.
Bri-Chem provides over 150 domestic and foreign drilling fluid products
to customers throughout Alberta, British Columbia and Saskatchewan, and
distributes drill pipe, carbon steel welded pipe, carbon steel seamless
pipe, stainless steel welded pipe, stainless steel seamless pipe,
tubing and casing, galvanized steel products as well as fittings and
flanges. Bri-Chem's customers operate in a wide range of industries,
including oil & gas, manufacturing, forestry, agriculture, construction
Forward Looking Statements
Certain statements contained in this press release, including statements
which may contain words such as "could", "should", "expect",
"anticipate", "believe", "will", and similar expressions and statements
relating to matters that are not historical facts are forward looking
statements. Such forward looking statements involve known and unknown
risks and uncertainties which may cause the actual results,
performances or achievements of Bri-Chem to be materially different
from any future results, performances or achievements expressed or
implied by such forward looking statements. Such factors include, but
are not limited to, fluctuations in oil and gas activity levels,
political and economic conditions, and the demand for products provided
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SOURCE Bri-Chem Corp.
For further information:
|Jason Theiss |
T: (780) 455 8667 x237
| || || ||Chris Haldane |
CHF Investor Relations
T: (416) 868-1079 x237
| || || ||Cathy Hume|
CHF Investor Relations
T: (416) 868-1079 x231