OIL COUNTRY TUBULAR GOODS (OCTG) PIPELINE TO DYNAMIC GROWTH

Transcription

1 OIL COUNTRY TUBULAR GOODS (OCTG) PIPELINE TO DYNAMIC GROWTH

2 DISCLAIMER This Presentation may contain forward-looking statements with respect to Lakeside Steel Inc. and its wholly-owned subsidiary, Lakeside Steel Corporation (collectively, the Company ), its operations, strategy, financial performance, and condition. These statements generally can be identified by use of forward looking words such as may, will, pro forma, expect, estimate, anticipate, intends, believe, or continue, or the negative thereof or similar variations. The actual results and performance of the Company discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations, and the factors described under Risk Factors in the Management s Discussion and Analysis and Filing Statement of Lakeside Steel Inc., which is available at The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on their behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the Company has no obligation to update such statements. The Reader is cautioned not to place undue reliance on forward-looking statements. 2

3 WHO IS LAKESIDE? Lakeside Steel Corporation is A leading, diversified North American manufacturer of highquality oil and gas industry pipe products Over 100 years of manufacturing experience Uniquely positioned as the only TSX:V publicly traded steel pipe and tube manufacturer in Canada Growth-oriented Extremely strong in supplying to key Distribution partners in the global high-growth oil and gas market 3

4 CORE ELEMENTS SIZE SCOPE QUALITY EXPERT TEAM ENERGY GROWTH GROWTH One of the largest independent producers of Casing and Stretch Reduced API Tubing based in North America Committed to OCTG Casing, Tubing, and Line Pipe for the Energy industry in North America Delivering highest quality ERW API Pipe and Tube Senior Management Team with over 200 years combined Pipe, Tube, and Steel experience Annual capacity of 450,000 tons High-output, high quality SRM Mill and new Alabama Casing Mill geographically positioned for growth 4

5 THE LAKESIDE RENAISSANCE Established a strategic corporate renewal plan and tactical market shift over18 months SALES TEAM FOCUS OCTG MARKET FOCUS U.S. MARKET EXPANSION NEW CAPITAL INVESTMENT NEW MANAGEMENT TEAM FLEXIBLE PRODUCT OFFERING with plans for continuing the momentum with programs that will drive additional growth REALIGNED SUPPLY CHAIN CONTINUED US GROWTH STREAMLINED CANADA PLANT 5

6 KEY FACTS o Alabama 10 Mill o Quench and Temper o Upsetting and Threading o New Welder o New Ultrasonic o 3-Slip Rail Siding o Virtual Macro 6

7 COMPANY STRENGTHS Unique high quality domestic product at competitive price North American brand recognition with key Distributors and End-users ISO certified and API 5L and 5CT Licensed since 1988 Dedicated, motivated, highly-skilled workforce of 400 Top quality North American raw material suppliers Strong position at key Processors for End-finishing, Heat-Treat, and FBNAU 7

8 SUPPLY CHAIN OPTIMIZATION On-site Rail Facility (Canada and Alabama) Allows Lakeside to load directly on-site and eliminate extra shipping step On-site Upsetting, Threading, and Normalizing Capabilities Allows in-house finishing function Improved Lead Times Best-in-Class Quality Program Increased Inventory Turns Exceeding Customer expectations for on-time delivery performance 8

9 A BRIGHT FUTURE WITH AN OVERRIDING FOCUS ON QUALITY AND SAFETY UPGRADED CANADA FACILITY ALABAMA USA FACILITY NEW PROCESSING FACILITY UNIQUE STRETCH REDUCED PRODUCT SHORT LEAD TIMES QUALITY SUPPLIERS PRODUCT FLEXIBILITY 9

10 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 US$/bbl STEEL CORPORATION OCTG DEMAND PARALLELS RIG COUNT Source: Pipe Logix WTI Crude Oil Price Chart $ $ $90.00 $80.00 $70.00 Historical Price 12 Month Forward Strip $60.00 Source: Baker Hughes Source: Bloomberg, Cormark Securities Inc. Source: Cormark 10

11 UNIQUE STRETCH REDUCED TUBING Standardized steel chemistry All Tubing upgradable L80, N80, and P110 Best in class rejection rates Excellent OD and wall thickness control SRM Tubing product competes well with Seamless Lakeside Stretch Reduced Tubing is considered normalized before upset 11

12 IS IT SEAMLESS? ERW STRETCH REDUCED ERW Weld Zone Pre-Stretch Reduction ERW Weld Zone Post-Stretch Reduction 12

13 WHY ALABAMA? New Facility to be located in Thomasville, Alabama (USA) Annual capacity of 192,000 NT Allows for optimization of supply chain o Close proximity to HRC Suppliers o Ideal rail, barge, and truck transportation to key markets Allows for reduced conversion costs Close proximity to key markets 13

14 LAKESIDE STEEL ALABAMA Project on schedule and on budget Equipment on schedule; very pleased with quality Hiring is going well No significant issues to-date First pipe trial slated for December 1, 2011 Excellent feedback from customers - strong indications on commitments for orders FEBRUARY

15 LAKESIDE ALABAMA PRODUCTS API 5L: Grade A, B, and X42-X70 API 5CT: Grade H40, J55, L80, N80, P110 Proprietary Spec : Stel 65 and Stel 80 Casing Products: 4 ½ 9 ⅝ ODs x.156 x.500 Wall Line Pipe Products: ¾ ODs x Wall 15

16 U.S. FINISHING OPERATIONS HEAT TREAT AND THREADING ARE CRITICAL CONSTRAINTS IN THE OCTG INDUSTRY Higher value-added product Standalone Heat Treat and Thread business SELF SUFFICIENCY IN PRODUCTION AND PROCESSING LAKESIDE FACILITIES Heat Treat Tubing Upsetting and Threading Casing Threading 16

17 FUTURE GROWTH OPPORTUNITIES Focusing on the Future Full-end Finishing in Canada and U.S. Premium connections Normalized Tubing in Canada facility Line Pipe: 60 Increased product range: 1 ¼ to 10 ¾ to Gauge Lakeside Steel Corporation - forging new frontiers in OCTG steel line pipe products Heat-Treat Tubing in Canada and Casing in U.S: L,N, and P110 17

18 Q&A Proudly manufacturing and distributing quality OCTG products throughout North America Lakeside Steel Corporation 160 Dain Avenue P.O. Box 1010 Welland, Ontario Canada L3B 5Y6 18