Timken invests $60M to grow small-bar steel capabilities

The Timken Company announced that it will invest approximately $60 million in its steel rolling mill operations to increase the company's capability to produce differentiated steel products. The investment will enable Timken to competitively produce steel bars down to 1-inch diameter for use in power transmission and friction management applications for a variety of customers, including the rapidly growing automotive transplants.

"We are making investments across our company to strengthen the differentiation of our technology and product portfolio," said James W. Griffith, Timken president and chief executive officer. "The expansion of our small-bar steel capabilities is part of our strategy of managing our company for value and taking advantage of strong market opportunities to improve our ability to create shareholder value throughout the economic cycle."

Assisting with the technical aspects of the project will be Daido Steel Company Ltd., a leading Japanese producer that has an outstanding reputation for manufacturing special quality small-bar steel and serving demanding customers, including Nissan, Honda and Toyota.

Daido and Timken also intend to explore other possible areas of collaboration in connection with the manufacture and supply of steel and steel-related products and services.

"We recognize Timken as a company with a long history of steelmaking experience and sophisticated technical performance," said Masatoshi Ozawa, president and chief executive officer of Daido Steel. "The collaboration with Timken will bring us the best solution to meet Japanese customers' expectation of success in transplant projects of special bar-quality steel in the United States. Building on this initiative, we also will be exploring other areas of possible collaboration."

The project will enable Timken to meet demanding requirements for special bar-quality steel from a wide range of customers in the bearing, industrial, energy, distribution and automotive segments, as well as Timken's automotive and industrial groups. Currently, some of this material is not readily available in the United States.

"We welcome this opportunity to work with Daido. They have an impressive reputation for manufacturing high-performance products and for providing customer service," said Salvatore J. Miraglia Jr., president of Timken's Steel Group. "We have already made investments to expand our large-bar capabilities to an industry-leading 15-inch outer diameter. With the new small-bar project, we will be extending our capabilities down to one-inch diameter, giving us an unmatched size range of alloy steel bar products in North America."

A 76,000-square-foot addition will be built at the Harrison Steel Plant in Canton, Ohio. The project will include expanded rolling, finishing and inspection capabilities. Construction is expected to begin in mid-June, with completion expected in mid-2008. Once complete, Timken expects to add approximately 30 new positions to operate the small-bar mill.