In Welland, Ontario-based Lakeside Steel's fiscal Q2 2012 earnings release, the company said that its new oil country tubular goods (OCTG) casing mill, which has an estimated capacity of 192,000 tons annually, will begin production in December 2011. The thermal treatment and end-finishing facility will be completed next January, which will add 67,000 annual tons of thermal treatment capacity and 55,000 annual tons of end finishing capacity for tubing products. The thermal treatment and end finishing facility for casing products will be completed in June 2012--this facility will add 150,000 annual tons of thermal treatment capacity and 110,000 annual tons of end finishing capacity for casing products.
Lakeside anticipates that the completion of its finishing and heat-treating will increase its competitiveness and profitability--Lakeside recorded a $7.6 million net loss in fiscal Q2. In the press release, Lakeside explained that so far in fiscal 2012, demand for OCTG has shifted from plain end pipe to thermally-treated and end-finished products, but there is a lack of sufficient capacity in the market, leading to extended wait times.
Ron Bedard, president and COO said that "The current lack of sufficient thermal treatment and end finishing capacity in the market illustrates the importance of Lakeside's vertical integration strategy. This strategy will enable Lakeside to become a full-service provider of thermally treated and end finished OCTG products."