CANTON, Ohio, Feb. 21, 2012 /PRNewswire/ -- After securing a new five-year labor agreement, officials at The Timken Company (NYSE: TKR) announced they will move forward with a $225 million investment at the Faircrest Steel Plant in Stark County, Ohio. With this investment, the specialty alloy steel manufacturer will improve productivity, expand its product range and increase capacity to serve growing demand for Timken® specialty alloy steel bars.
"This is a good day for our customers around the world, for our company and for the local community," said Salvatore J. Miraglia, Jr., Timken president – steel. "We've received great support for our steel expansion from state and local officials and suppliers, and now our employees have put the last element in place to make this project a go."
Tuesday's ratification of a new extended labor agreement between Timken and members of United Steelworkers (USW) Local 1123 establishes workforce stability through project construction and startup in 2014. The labor agreement covers four facilities in Stark County through Sept. 2017 and replaces an agreement that would have expired in the midst of the project's start-up in 2013.
"We are seeing growing demand for Timken specialty steel to support the most demanding energy and industrial applications," said Miraglia. "This is the right time to make the kind of investment that will improve our operating performance while also expanding our capacity and size range for these products. Combined, that will strengthen our ability to serve these important industries and position the business for continued profitable growth and greater shareholder value."
A new ladle refiner and large-bloom continuous caster are central to the productivity gains from the investment. The new equipment also is expected to increase the Faircrest operation's shippable capacity by 25 percent and enable the production of a broader range of large-diameter bars.
"We have a highly skilled, capable workforce committed to continuous improvement," said Thomas D. Moline, vice president of steel manufacturing. "Our team understands what it takes to make custom-melted, high-quality alloy bars and tubes that meet our customers' exacting metallurgical requirements. This investment, which is the largest since opening the plant in 1985, builds on those skills to improve our productivity, while giving us the ability to offer even more to the customers who rely on us for their own success."
Timken, known for the reliability of its power transmission products that include bearings, gears and related components, cites its century-long steelmaking expertise as a key competitive differentiator. In 2011, the Timken steel segment melted 1.7 million tons of raw materials to generate $2 billion of sales of its custom-designed steel. To further productivity and growth, the company invested more than $200 million in its steel operations in northeast Ohio in the last five years. The most recent of those investments included a $35 million high-volume in-line forge press at the Faircrest rolling mill, which is under construction, and $50 million in capital improvements at its Harrison and Gambrinus steel plants.
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