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Lakeside Steel to Build End-Finishing and Heat Treat Facility
03/01/2011 - The Lakeside Steel Board of Directors has approved plans to build a new state-of-the-art end-finishing and heat treatment facility that will provide vertical integration of finished and upgraded tubular products.
The Lakeside Steel Inc. Board of Directors has approved plans to build a new state-of-the-art end-finishing and heat treatment facility that will provide vertical integration of finished and upgraded tubular products. The decision is also supported by growing demand for premium tubular solutions due to a proliferation and growth of unconventional gas and oil development throughout North America.
The company has placed orders for all of the critical equipment, and expects to start construction in the next three months. The facility, which is expected to cost approximately CDN $12 - $15 million including working capital, is scheduled to supply commercial products by February 2012.
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. It will process tubing manufactured at the company's facility in Welland, Ont., 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 under construction in Thomasville, Ala.
“This is another important step in Lakeside Steel providing higher value-added products to our current and future customers,” commented Ron Bedard, President and Chief Operating Officer. “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".
Advanced discussions are currently underway regarding several potential locations for the new end-finishing and heat treatment facility. The company expects that the new facility will be built on a separate parcel of land as a stand-alone business, 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.
Lakeside Steel is the parent company of Lakeside Steel Corp. Located in Welland, Ont., Lakeside is a diversified steel pipe and tubing manufacturer with a focus on manufacturing and upgrading Oil Country Tubular Goods. Lakeside's list of customers includes large oil and gas end users as well as distributors across North America.
Lakeside Steel also indirectly wholly owns Lakeside Steel Alabama, which will be a diversified steel pipe manufacturer strategically situated in the southern United States on successful completion of facility construction in Thomasville, Ala.
