Carpenter Technology Corporation announced today that it will construct a new 400,000 square foot state-of-the-art manufacturing facility in response to strong customer demand for premium products primarily in the fast-growing aerospace and energy industries. The new facility will ultimately be capable of producing approximately 27,000 tons per year of additional premium product and is part of Carpenter's ongoing commitment to expand capacity, reduce lead times, and improve customer service.
"Earlier this year, we outlined a corporate strategy centered on optimizing our core business, accelerating growth with acquisitions, and investing in technology and capacity," said William A. Wulfsohn, President & CEO. "Our new facility will play a key supporting role in each of these areas. The core business will be strengthened with increased premium capacity to support expanded long-term customer agreements and with more efficient operations utilizing advanced technology. This investment will also enable Carpenter to support the increased demand related to the Latrobe (pending), Amega West, and Oilfield Alloys acquisitions. Finally, this expansion will support increased demand expected from the sales of new technologies we plan to commercialize over the coming years."
The facility will be built on one of several 200+ acre greenfield sites currently under consideration and will cost approximately $500 million. The new facility will include remelting, forge, and associated finishing and testing capabilities.
The project will be financed over a multi-year period. Guidance provided by the Company for fiscal 2012 capital spending of about $200 million remains unchanged. Much of the funding for this project in future years will come from operating cash flow. Note that steps taken earlier this summer have improved the Company's capital structure. Carpenter's liquidity position was improved with excess funds from a 10-year bond offering and a renewed and up-sized $350 million five-year revolving credit facility.
David L. Strobel, Senior Vice President - Global Operations, sees this initiative as Carpenter's next step in advancing the company's leadership in the production of premium alloys. "The new facility will play a key role in further developing our capabilities in the production of our premium products, primarily serving the aerospace and energy markets. This facility will deploy the latest technology, and coupled with our strong experience and know-how, will serve both Carpenter and our customers well into the future. We are excited to build this into our strong list of capabilities."
The facility is expected to be operational in approximately 30 months.
Carpenter Technology produces and distributes conventional and powder metal specialty alloys, including stainless steels, titanium alloys, tool steels and superalloys. Information about Carpenter can be found at www.cartech.com.