NEW YORK Michigan
Seamless Tube LLC (MST) is getting a $25-million investment
from parent company Optima Specialty Steel Inc. to expand its
product offerings and increase production capacity at its South
Lyon, Mich., facility by between 700 and 1,300 tons per
"These investments are to expand
our product range to make product that we never made before and
offer (customers) better tolerances and better tubing
characteristics than we ever did before," Les Whitver,
MSTs vice president of operations, told AMM.
The majority of the investment,
$19 million, will go toward the purchase of a new cold Pilger
mill and a building to house related tools and processing
equipment. The remaining $6 million will be used to purchase a
377-foot atmosphere control furnace, the company said.
The furnace is expected to start
operating in April 2014, while the millwhich will allow
the company to increase product lengthswill be fully
operational in early 2015.
MSTs expansion is
targeting the oil and gas market, for which "the horizon looks
very, very good," as well as the power generation market,
"whether its the guys that are burning coal or the
natural gas plants," MST vice president of sales and marketing
Ted Fairley said.
While not large in the context
of recently announced projects in the pipe and tube sector, the
expansion is sizeable for the smaller-diameter tubing market
that the company serves. "If you put that into perspective of
specialty tubing here, its quite a significant
expansion," Fairley said, adding that it amounted to
"approximately a 20- to 25-percent increase here overall" for
The company makes carbon and
alloy seamless cold-drawn pipe and tube, with a production
capacity of more than 40,000 tons annually. After the expansion
is complete, output will climb to more than 50,000 tons per
year, "based on product mix," a company spokesman told
AMM via e-mail.
"Our hot mill has been
underutilized historically, and this Pilger mill will allow us
now to maximize (the mill)," Fairley said. "Nobody else is
using a Pilger mill to make carbon and alloy tubing."
MSTs track record and the
success of the equipment in making other products should
alleviate any start-up concerns, he said. "The technology is
proven, MST as a supplier is proven."
The company is targeting inroads
into the alloy tubing market following the expansion. "With
this expansion, we really should be able to be a leader in the
alloy pipe market," Fairley said.
Optima Specialty Steel
previously invested $1.5 million to add oxygen fuel burners, $6
million for a fifth pickle house and $4.5 million for a new
quench and temper line, according to MST.
"This is a big step, and what it
really does is increase the efficiencies of MST," Mordechai
Korf, chief executive officer of Miami-based Optima Specialty
Steel, told AMM, adding that Optima also is
considering further investments in some of its other
subsidiaries, which include Kentucky Electric Steel LLC,
Ashland, Ky., and Niagara LaSalle Corp., Hammond, Ind.