Greenfield aluminum coil coating facility to
be constructed near St. Louis,
Missouri
New facility will primarily serve the aluminum
coil coating market
Completion expected by 2025 adding over 120
million pounds of annual capacity
Firm contractual customer commitments for 75%
of volume
Expect sales of at least $60 million by 2026
FORT
WORTH, Texas, Nov. 11,
2022 /PRNewswire/ -- AZZ Inc. (NYSE: AZZ), the
leading independent provider of hot-dip galvanizing and coil
coating solutions, today announced its plan to construct a new
aluminum coil coating facility, complete with value-added
downstream processing, near St.
Louis, Missouri. The 25-acre facility will be located
in the new Oldenburg Industrial Park in Washington, Missouri and is expected to be operational in
2025. Upon completion, AZZ Precoat Metals will operate a
network of 14 facilities including 16 coating lines and 19
value-added processing lines, adding to their industry leading
capacity and capability. AZZ Precoat Metals has secured long-term
contractual customer commitments for over 75% of the new capacity.
Tom Ferguson, Chief Executive
Officer of AZZ Inc., commented; "The addition of the Washington coil coating facility with
state-of-the-art equipment and technology will strengthen Precoat's
position to effectively serve the growing aluminum market. This
project was contemplated in our strategic rationale for acquiring
Precoat Metals earlier this year and is a key element of our growth
roadmap for the coil coating segment. Aluminum coil
coating is an important strategic initiative for AZZ, benefitting
from secular sustainability tailwinds. We are dedicated to
expanding our coatings capabilities, addressable markets, and
customer base as we continue to transform AZZ into a focused
coatings company. The project will not have a material impact
on AZZ's debt leverage nor our previously stated goal of 3.0x debt
leverage by 2024. The capital structure makes use of
approximately $60 million in progress
payments over the estimated two-year construction timeline from
existing credit facilities. An additional $50 million in related operating lease agreements
will not require payment until lease commencement."
"I would like to thank both the City
of Washington and the State of
Missouri for providing a compelling incentive package. Given
the planned ramp in contracted volumes, we expect sales of at least
$60 million by 2026 with an EBITDA
margin that nicely exceeds the fleet average for Precoat and is
well above AZZ's internal rate of return. I am confident that
Kurt and his team will bring the production facility online by
2025, given their demonstrated ability to execute prior major
investments," concluded Mr. Ferguson.
Kurt Russell, President &
Chief Operating Officer of AZZ Precoat Metals, commented; "We
selected the Washington location
due to the growing economic development occurring in the
area. Additionally, the close proximity to our existing
operations ensures local engineering and operational resources will
be available for a timely startup. We are pleased to secure a
location with several logistical advantages ideally situated for
our valued customer base." Upon completion, the new facility
is expected to generate over 80 skilled jobs for the area. Mr.
Russell added, "I want to thank both the City of Washington and the State of Missouri for partnering with us
through both the Missouri Works and Missouri One Start programs on
this exciting project. We are pleased to invest in and be a
part of Washington's future."
About AZZ Inc.
AZZ Inc. is the largest
independent provider of hot-dip galvanizing and coil coating
solutions to a broad range of end-markets. Collectively, our
business segments provide sustainable, unmatched metal coating
solutions that enhance the longevity and appearance of buildings,
products and infrastructure that are essential to everyday
life.
Safe Harbor Statement
Certain statements
herein about our expectations of future events or results
constitute forward-looking statements for purposes of the safe
harbor provisions of The Private Securities Litigation Reform Act
of 1995. You can identify forward-looking statements by terminology
such as "may," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or
the negative of these terms or other comparable terminology. Such
forward-looking statements are based on currently available
competitive, financial and economic data and management's views and
assumptions regarding future events. Such forward-looking
statements are inherently uncertain, and investors must recognize
that actual results may differ from those expressed or implied in
the forward-looking statements. Certain factors could affect the
outcome of the matters described herein. This press release may
contain forward-looking statements that involve risks and
uncertainties including, but not limited to, changes in customer
demand for our products and services, including demand by the power
generation markets, electrical transmission and distribution
markets, the industrial markets, and the metal coatings
markets. In addition, within each of the markets we serve,
our customers and our operations could potentially continue to be
adversely impacted by the ongoing COVID-19 pandemic, including
governmental issued mandates regarding the same. We could also
experience additional increases in labor costs, components and raw
materials, including zinc and natural gas, which are used in our
hot-dip galvanizing process; supply-chain vendor delays; customer
requested delays of our products or services; delays in additional
acquisition or disposition opportunities; currency exchange rates;
availability of experienced management and employees to implement
AZZ's growth strategy; a downturn in market conditions in any
industry relating to the products we inventory or sell or the
services that we provide; economic volatility or changes in the
political stability in the United
States and other foreign markets in which we operate; acts
of war or terrorism inside the United
States or abroad; and other changes in economic and
financial conditions. AZZ has provided additional information
regarding risks associated with the business in AZZ's Annual Report
on Form 10-K for the fiscal year ended February 28, 2022, and other filings with the
Securities and Exchange Commission ("SEC"), available for viewing
on AZZ's website at www.azz.com and on the SEC's website at
www.sec.gov. You are urged to consider these factors
carefully in evaluating the forward-looking statements herein and
are cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by this
cautionary statement. These statements are based on information as
of the date hereof and AZZ assumes no obligation to update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Company Contact:
David Nark, Vice President of
Marketing and Communications and Investor Relations
AZZ Inc.
(817) 810-0095
www.azz.com
Investor Contact:
Joe
Dorame, Managing Partner
Lytham Partners
(602) 889-9700
www.lythampartners.com
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SOURCE AZZ Inc.