Allegheny Technologies Inc. announced an expansion of its premium-melt nickel-based alloy, superalloy, and specialty alloy production capabilities. The investments are aimed at increasing ATI's capacity to produce high performance alloys for aero-engine rotating parts; airframe applications; oil and gas exploration, extraction, and refining; and power generation land-based turbines and flue gas desulfurization pollution control units. The incremental capital investments of approximately $30 million over the next 15 months will be funded from internal cash flow.

Major projects of this expansion, which is expected to increase ATI's premium-melt capacity by approximately 20%, include:

• Upgrading and expanding vacuum induction melt (VIM) capacity. VIM is a melting process designed for premium grades with high alloy content that require more precise chemistry control and lower impurity levels.
• Installation of two new electro-slag remelt (ESR) furnaces and three new vacuum arc remelt (VAR) furnaces. ESR and VAR furnaces are consumable electrode remelting processes used to improve both the cleanliness and metallurgical structure of alloys.

"We expect growth of approximately $70 million of annual revenue with attractive after-tax returns from these capital projects when they are implemented," said Pat Hassey, Allegheny Technologies Chairman, President and CEO. "These incremental capital investments add premium-melt capacity to help maximize the potential of our installed asset base and optimize market opportunities for ATI. As a result of investments made during the past several years, ATI has unparalleled finishing operations for a broad range of high performance alloys in straight-length and flat-rolled products.

"These strategic investments to expand our nickel-based alloy, superalloy, and specialty alloy product capabilities are another milestone in profitably growing our high performance metals business. This expansion follows our recently announced $100 million investment to grow ATI's titanium product capabilities."

Allegheny Technologies says that market demand for premium-melt nickel-based alloy, superalloy, and specialty alloy products is currently strong and is expected to continue to grow.

• Aerospace market demand for ATI's premium-melt alloys, for both aero-engine and airframe applications, is expected to continue to be robust for the next several years. The new generation of fuel efficient aircraft increases the need for ATI's nickel-based superalloys and high-strength specialty stainless alloys.
• Oil and gas market demand for ATI's premium-melt alloys is strong for sub-sea piping, banding straps for flow lines, umbilical, instrumentation, and injection tubing. Deeper wells and more corrosive conditions increase demand for premium-melt nickel-based and specialty alloys.
• Power generation market demand for ATI's premium-melt alloys is expected to be strong for industrial gas turbines (IGT) and flue gas desulfurization (FGD) pollution control equipment. Demand for FGD units at coal power generation plants is expected to grow in the United States as a result of legislation. In addition, strong demand is expected to continue from Asia for both new power plants and upgrades of pollution control equipment.

Allegheny Technologies is a leading producer of nickel-based alloys, superalloys, and specialty alloys. ATI manufactures straight-length products (long products), including ingot, billet, bar, and rod; and flat-rolled products, including plate, sheet, and strip. ATI is a technology leader in manufacturing, research and development for these products.