Carpenter Technology Breaks Ground for $115 Million Facility in Reading
June 06 2007 - 1:38PM
Business Wire
Carpenter Technology Corporation (NYSE:CRS) today broke ground for
a $115 million facility in Reading, Pa., to expand its premium melt
capacity by 40 percent. The Company�s Chairman, President and CEO
Anne Stevens made the announcement. The facility will be located at
101 West Bern Street in Reading. �This investment further
strengthens Carpenter�s position in specialty materials
manufacturing, and demonstrates its confidence in domestic
production and commitment to the community,� said Stevens. The
expansion of the Company�s melt capacity and related
infrastructure, which is expected to be completed by mid-fiscal
year 2009, is part of approximately $200 million in capital
expenditures that the Company will make over the next four years
under the strategic plan it announced in September 2006. Premium
melting is the first step in producing Carpenter�s specialty alloys
for critical applications used in the aerospace, energy, medical
and automotive markets. The premium melt expansion will allow the
Company to meet the demand expected over the next several years
from those key end-use markets. Carpenter believes that more than
$500 million of organic growth opportunities in its highest margin
business exist over the next several years in those markets, which
require high performance products made to exacting specifications
for critical applications that cannot be easily substituted. The
premium melt expansion will complement Carpenter's existing
state-of-the-art melting, forging and finishing operations. These
operations are being enhanced with laser technology welding for
strip finishing and centerless turning equipment for bar finishing.
"This expansion of our premium melt capacity reflects the
increasing demand for premium alloy materials that is at the heart
of Carpenter's growth plan," said Stevens. "The investment is a
continuation of our strategy to focus on higher value materials
that have applications in niche markets." Stevens added, "The
growth over the next several years for Carpenter's high-margin
products is the result of increased needs for the more specialized
products manufactured by the Company's aerospace, energy, medical,
automotive and truck customers. However, these growing
opportunities can only be captured by the timely strategic
deployment of adequate capacity and technical resources that meet
both the current and future demands of these key end-market
customers." Dennis M. Oates, senior vice president of Carpenter�s
Specialty Alloys Operations added, "Our decision to make this
significant investment reflects not only our confidence in the
markets but also our confidence in our workforce in Reading and at
our other supporting operations. Our highly skilled and dedicated
employees will ensure the success of this project." The Company
expects that the investment will generate approximately $150
million of additional revenue from the sale of higher value
products by fiscal year 2010 (ending June 30) and provide
significant returns on the capital invested. At the core of the
Company's premium melt capacity expansion program will be an
approximate 40 percent increase in its vacuum induction melting
(VIM) capacity. VIM furnaces are typically used in the first
melting step to produce materials for demanding applications, such
as high-temperature and highly corrosive environments, high purity
alloys for medical procedures, and specialty applications in
automotive and truck. The expansion program also includes four
vacuum arc remelting (VAR) furnaces and two electro-slag remelting
(ESR) furnaces. These furnaces are used in the production of higher
margin products for critical end applications, such as rotating
aircraft engine parts, high performance automotive and truck engine
parts and medical devices. These furnaces will augment the
Company's existing 27 VAR and ESR furnaces, two of which were added
in December 2006. The expansion program will also include related
annealing, homogenization and other process machinery; associated
testing equipment, raw materials management systems, and
information technology infrastructure. Carpenter produces and
distributes specialty alloys, including stainless steels, titanium
alloys, and superalloys, and various engineered products.
Information about Carpenter can be found at www.cartech.com. Except
for historical information, all other information in this news
release consists of forward-looking statements within the meaning
of the Private Securities Litigation Act of 1995. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ from those projected,
anticipated or implied. The most significant of these uncertainties
are described in Carpenter's filings with the Securities and
Exchange Commission including its annual report on Form 10-K for
the year ended June 30, 2006, its subsequent Form 10-Q, and the
exhibits attached to those filings. They include but are not
limited to: 1) the cyclical nature of the specialty materials
business and certain end-use markets, including aerospace,
industrial, automotive, consumer, medical, and energy including
power generation, or other influences on Carpenter's business such
as new competitors, the consolidation of customers, and suppliers
or the transfer of manufacturing capacity from the United States to
foreign countries; 2) the ability of Carpenter to achieve cost
savings, productivity improvements or process changes; 3) the
ability to recoup increases in the cost of energy and raw materials
or other factors; 4) domestic and foreign excess manufacturing
capacity for certain metals; 5) fluctuations in currency exchange
rates; 6) the degree of success of government trade actions; 7) the
valuation of the assets and liabilities in Carpenter's pension
trusts and the accounting for pension plans; 8) possible labor
disputes or work stoppages; 9) the potential that our customers may
substitute alternate materials or adopt different manufacturing
practices that replace or limit the suitability of our products;
10) the ability to successfully acquire and integrate acquisitions;
and 11) the ability of Carpenter to implement and manage material
capital expansion projects in a timely and efficient manner. Any of
these factors could have an adverse and/or fluctuating effect on
Carpenter's results of operations. The forward-looking statements
in this document are intended to be subject to the safe harbor
protection provided by Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Carpenter undertakes no obligation to update or revise
any forward-looking statements.
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