AZZ Inc., one of the leading independent providers of hotdip galvanizing and coil coating solutions, 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 outstanding 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 Washingtonlocation 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.”
