Lakeside Steel Inc. Thursday announced plans to build a new manufacturing facility in Thomasville, Alabama. Once fully operational, the new facility is expected to add 192,000 tons of capacity, approximately doubling the Company's total production capacity and creating sufficient new capacity on OCTG casing products. The project is expected to be financed through a combination of equity and debt.
The total cost of the expansion project is estimated to be $40 million comprised of $22 million for plant and equipment and $18 million for inventory and working capital.
Thomasville, Alabama was chosen because of its proximity to both raw material suppliers and customers. Lakeside believes strongly that Alabama provides the right environment in which to operate a manufacturing business and Thomasville specifically will be conducive to a productive and profitable operation for years to come. The City of Thomasville is located 100 miles north of Mobile, Alabama, and is 600 miles east of Houston, Texas. Once completed, the new facility will be the largest industrial employer in the City of Thomasville. This expansion project remains subject to the entering into of definitive agreements.
The Company expects to start construction on the Thomasville expansion project in the fall, 2010 and plans to be producing pipe for the OCTG and line pipe market by December of 2011.