August 4, 2010

Lakeside Steel building Alabama manufacturing plant

WELLAND, Ont.

Lakeside Steel Inc. says a planned $40-million manufacturing plant in Thomasville, Ala., will nearly double the steelmaker’s total production capacity.

Lakeside, based in Welland, Ont., has announced plans for the new plant, which is expected to add 195,000 tonnes of production.

The steelmaker says the new plant is being built to add capacity to meet growing demand from American customers, the majority of which are located in the southern United States.

The plant should create up to 120 new jobs at Lakeside in Thomasville, about 160 kilometres north of Mobile, Ala.

The city was chosen as the site because of its close proximity to both raw material suppliers and customers, Lakeside said.

The project is expected to be financed through a combination of equity and debt.

The company expects to start construction on the project in the fall and plans to be producing pipe by December 2011.

Lakeside says it will seek regulatory and shareholder approval to issue 1.1 million shares to seven senior employees as retention and incentive bonuses.

The shares will be issued in increments over a two-year period.

Lakeside manufactures steel pipe and tubing for oil and gas, mining, automotive and commercial and industrial supply companies.

In late March, the company said it would boost production at its Welland plant to meet “significantly stronger demand’’ from its energy industry customers.

There is a growing need for steel pipe for wells and pipelines in the rapidly expanding shale gas industry in the U.S. Appalachian region.

Lakeside Steel has also expressed interest in buying U.S. Steel’s Canadian assets if it is forced to sell them as part of a lawsuit launched by the federal government against the steel giant, based in Pittsburgh, over promises it made when it bought Hamilton-based Stelco in 2007.

Canadian Press

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