AZZ to Increase Coating Production in North America

AZZ to Expand Coatings Production in North America AZZ Inc., a leading independent supplier of hot-dip galvanizing, announced plans to establish a new aluminum coil coating facility with value-added, downstream finishing capabilities near St. Louis, Missouri. The 25-acre facility will be located in the new Oldenburg Industrial Park in Washington, Missouri, and is expected to become operational in 2025. Following the facility's launch, AZZ Precoat Metals will operate a network of 14 facilities, including 16 coil coating lines and 19 value-added processing lines, increasing top-tier capacity and production capabilities. AZZ Precoat Metals has secured long-term customer commitments for more than 75 percent of the new capacity. Tom Ferguson, CEO of AZZ Inc., said, "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 is one of the key elements of our growth roadmap in the coil coating segment and represents one of the strategic reasons behind our acquisition of Precoat Metals in the early months of this year. Aluminum coil coating is an important strategic initiative for AZZ, capitalizing on sustainability tailwinds. As we continue to transform AZZ into a focused coatings company, we have committed ourselves to expanding our coating capabilities, the markets we serve, and our customer base. The project will have no material impact on AZZ's investment leverage or our 3.0x investment leverage target by 2024 as previously stated. The capital structure will utilize estimated earned payments of approximately $60 million over the planned two-year construction period from existing credit facilities. An additional $50 million in related operating lease agreements requires no payment until lease commencement," Ferguson stated. Ferguson continued, "I want to thank both the Washington administration and the State of Missouri for providing a difficult-to-achieve incentive package. Given the planned increase in contracted volumes, we expect sales of at least $60 million by 2026, with EBITDA margins exceeding the fleet average at Precoat somewhat, and AZZ's internal rate of return well above," he added. "Given the success Kurt and his team have demonstrated in executing previous major investments, I am confident they will have the production facility operational by 2025," Ferguson concluded. Kurt Russell, President and Director of Operations of AZZ Precoat Metals, said, "We selected the Washington location due to economic development growth in the region. Additionally, the proximity to our existing operations ensures timely deployment of local engineering and operational resources. We are pleased to have secured a location with various logistical advantages situated in an ideal position for our valued customer base. When completed, the new facility is expected to create more than 80 skilled jobs for the region. "I want to thank both the City of Washington and the State of Missouri for partnering with us on this exciting project through the Missouri Works and Missouri One Start programs. We are pleased to invest and be part of Washington's future," Russell said. Source