Allegheny Technologies (ATI) Board Approves $1.16B Strategic Investment in Flat-Rolled Products Unit

September 17, 2008 8:34 AM EDT

Allegheny Technologies Incorporated (NYSE: ATI) announced that its Board has approved a strategic investment in ATI's Flat-Rolled Products segment. The project is estimated to cost approximately $1.16 billion and take four years to complete. The return on investment should be more than 20% by 2014, including estimated annual cost reductions of $120 million. The project is expected to be self-funded. As a result of this strategic investment, ATI's annual capital expenditures are likely to remain in the range of $500-$600 million for 2009 through 2012.

The strategic investment includes:

1. A new advanced specialty metals hot rolling and processing facility: This investment, which should be completed in 2012, is designed to produce exceptional quality, thinner, and wider hot-rolled coils at reduced cost with shorter lead times, and lower working capital requirements. ATI has tentatively chosen to locate the advanced specialty metals hot rolling and processing facility at its Brackenridge, PA site pending resolution of certain open issues, including state and local approvals.
   
2. The consolidation of the Natrona, PA grain-oriented electrical steel melt shop into ATI's Brackenridge, PA melt shop: This consolidation is expected to improve the overall productivity of ATI's flat-rolled grain-oriented electrical steel and other stainless and specialty alloys, and reduce the cost of producing slabs and ingots. The investment should also result in significant reduction of particulate emissions. This consolidation is expected to be completed in 2010.

Allegheny Technologies Incorporated manufactures and sells specialty metals worldwide.

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