HUNTCO TO DEVELOP COLD ROLLING STEEL MILL TO PRODUCE COLD ROLLED STEEL SHEET IN BLYTHEVILLE, ARK.
CHESTERFIELD, Mo., Oct. 18 /PRNewswire/ -- Huntco Inc. (NASDAQ: HUNT), a Chesterfield-based intermediate steel processor, today announced its intention to develop a new plant at its existing facility in Blytheville, Ark. to produce cold rolled steel sheet. The new plant will be approximately 150,000 square feet and will be equipped with a new cold reversing mill, a temper mill, and annealing furnaces, as well as other support equipment including overhead cranes, and will be dedicated to the production of steel sheet up to 60 inches in width. The cold rolling plant and equipment will cost in the range of $21 to $24 million, will have a capacity of approximately 240,000 tons per year and will take approximately 18 months to construct and become operational. This new operation at Huntco's Blytheville facility is expected to employ approximately 20 people. The company indicated that while it does not currently produce cold rolled steel sheet and that cold rolled steel is currently a small portion of the total volume of tons processed by its steel processing operations, it is well positioned to undertake the project and to capture sufficient market share in the areas in which its existing steel processing centers operate to productively utilize this new capacity. Certain of the key factors which the company believes are important in regard to its decision to develop cold rolling capabilities at Blytheville are: -- cold rolled steel, which is a product used by many of the company's existing customers, is a higher value added product than the company's base processing business which is primarily the processing of hot rolled steel coils; -- the company's Blytheville facility is strategically located in close proximity to Nucor Corp.'s Hickman, Ark. thin-slab mill, a low cost producer of hot rolled steel coils, and with its access to the inland waterway system, will allow the company to receive hot rolled steel coils from other low cost steel producers; -- the company is currently constructing a new coil pickling plant at its Blytheville facility which is scheduled to commence operations in May 1994. Pickled, hot rolled steel coils serve as the feed stock for the cold rolling operation. The combination of access to low cost hot rolled steel coils and its own, low cost source of pickling, should provide Huntco with competitive costs for the feed stock for the cold rolling operation; -- access to the inland waterway system will allow the company to ship cold rolled steel coils economically to relatively distant locations; -- with the company's Blytheville facility serving as a supply hub for its other processing centers and again utilizing the inland waterway system, the company plans to develop further cold rolled steel processing capabilities, including slitting and cut-to-length, at its other locations as well as selling unprocessed, cold rolled steel coils. The primary markets which the company will target will include many customers for which it currently processes hot rolled steel as well as many new customers including, service centers, tube manufacturers, construction products, container products, motor manufacturers and other users of light gauge steel sheet. The company is evaluating financing alternatives for this project and to fund increased working capital requirements to support the new capacity, including debt, an equity offering of up to 1,000,000 shares of its Class A Common Stock, or a combination of debt and equity. The company expects to finalize its decision on financing alternatives within 30 days. Huntco is a major, intermediate steel processor, specializing in the processing of flat rolled carbon steel and is also a leading manufacturer of compressed air cylinders. -0- 10/18/93 /CONTACT: Robert J. Marischen of Huntco, 314-878-0155/ (HUNT)
CO: Huntco Inc. ST: Missouri, Arkansas IN: SU:
MC -- DV011 -- 3555 10/18/93 16:16 EDT
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|Date:||Oct 18, 1993|
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