(April 28, 2011)

The Timken Company is accelerating capacity expansions in Asia, including its Chennai, India, plant and its plants in Wuxi and Xiangtan, China.

Timken India Manufacturing Pvt Ltd, it's wholly owned subsidiary, plans to invest around Rs 200 crore towards capacity expansion. The Chennai facility is currently manufacturing 8 to 12 inch bearings which are used in power infrastructure and construction equipment.
In the second phase, which is expected to commence commercial production in the first three months of 2012, the company will manufacture zero to eight inch bearings for automotive sector. In the third phase, the company plans to manufacture bearings of 12 to 18 inch which are used in the heavy power transmission equipment industry.

Timken plans to invest more than Rs. 80 crore in each of these phases. Timken will also invest in it's Jamshedpur facility (Timken India Ltd.) and it's engineering centre in Bangalore (Timken Engineering and Research India Pvt Ltd.)

The Timken Company has reported sales of $1.3 billion in the first quarter of 2011, an increase of 37 percent over the same period a year ago. The sales increase is due to stronger global demand across most of the company's end markets as well as higher material surcharges and pricing.

"We are driving productivity, capacity improvements and new product introductions to serve growing demand from our customers around the world," said James W. Griffith, Timken president and chief executive officer.

Timken is increasing its 2011 full-year sales outlook to be up approximately 20 to 25 percent over 2010, driven primarily by stronger demand in the Steel, Process Industries and Mobile Industries segments.

Outlook

Mobile Industries segment sales to be up 10 to 15 percent, with increased overall demand in the off-highway, rail and heavy-truck sectors;
Process Industries segment sales to be up 20 to 25 percent, driven by increased demand from global industrial distribution, combined with sales of new products and continued growth in Asia;
Aerospace and Defense segment sales to be up 5 to 10 percent, reflecting improving demand in commercial aerospace and health and positioning control sectors, while the defense sector remains weak; and
Steel segment sales to increase 35 to 40 percent from 2010, driven by improved demand across all market sectors, capacity increases and surcharges.

Segment Results

In the first quarter, Mobile Industries' sales were $443 million, up 21 percent from last year's first-quarter sales of $367.5 million. Higher demand across all of the segment's end markets drove the increase, led by the off-highway and rail sectors.

Process Industries' first-quarter sales were $285 million, up 38 percent from $206.6 million for the same period a year ago. Increased global demand from industrial distribution, growth in Asia and sales of new products contributed to the improvement.

Aerospace and Defense had first-quarter sales of $79.1 million, down 14 percent from $92.1 million for the same period last year. The decline reflects reduced demand, principally in the segment's defense-related business.

Sales for the Steel segment, including inter-segment sales, were $481.5 million in the first quarter, an increase of 78 percent from $270.3 million for the same period last year. Stronger demand, particularly in the oil and gas and industrial market sectors, and surcharges contributed to the improvement. Raw-material surcharges increased approximately $75 million from the first quarter last year.

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