Mar 1 2011
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".
Source: http://www.lakesidesteelcorp.ca/