Carpenter Technology Corporation
) is planning to build a manufacturing plant in China to address
the rising customer demand in Asia. The move is driven by the rapid
growth in that region. However, the Pennsylvania-based company has
yet to finalize the location for the new facility.
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The company said that the construction of the fully-owned metal bar
finishing facility is expected to consummate in 18-24 months at a
total cost of roughly $20 million. The plant will have an initial
capacity to process roughly 1,500 tons of premium small diameter
metal bars annually.
Carpenter makes specialty alloys, including stainless steels,
titanium alloys and superalloys primarily for the aerospace and
energy industries. It is a major player in the metallurgy industry
Allegheny Technologies Inc.
Carpenter's revenues surged 33% year over year in the fourth
quarter of fiscal 2012 (ended June 30), buoyed by solid growth in
its Aerospace & Defense division. The segment benefited
from strong demand for engine materials and higher airplane build
rates. The company is poised to expand share in the aerospace
market in 2012.
The company recently said that it is selling two of its
distribution businesses to focus more on manufacturing and selling
its core specialty alloys products for high-growth markets. It
plans to reinvest the proceeds from the divestiture in its premium
While Carpenter remains committed to expand its footprint across
fast-growing overseas markets, it continues to concurrently invest
on capacity expansions in its core U.S. operation to meet
increasing customer demand. Its $500 million investment to build a
premium product facility in Alabama and expansion of its Florida
facility underlines this strategy.
Carpenter currently retains a Zacks #3 Rank, which translates into
a short-term Hold rating.