TMS International Announces New Contracts Totaling More Than $266M
TMS International (NYSE: TMS), the parent company of Tube City IMS Corporation, a leading provider of outsourced industrial services to steel mills globally, today announced that it has secured new mill services contracts totaling more than $266 million in revenue over the life of the contracts at expected production levels and commercial sales, with aggregate growth capital investments of approximately $52 million.
The terms of the contracts, and a new joint-venture, vary and are for a variety of outsourced services at steel mills in Poland, Belgium, Malaysia and the United States.
The first contract represents one of the largest single contract wins in the history of the company and will mark the company's first mill services operation at a steel mill in Poland. The long-term contract includes a comprehensive suite of services being outsourced for the first time by the mill, including transportation, processing and sales of slag, as well as scrap handling, receiving, inventory control, loading and delivery to charge buckets. Services under the contract are scheduled to be phased-in beginning March 2013 with the processing and metal recovery from an existing slag bank, and full implementation of all services scheduled for the second quarter of 2014.
The company has also contracted to provide additional services at steel mills in Belgium and the United States, expanding the company's presence in both countries with existing customers. Further, the company continues to maintain its leading presence in the United States, where it performs on-site outsourced mill services in 57 of the United States' 115 steel producing mills.
"This new contract win in Poland further expands and solidifies TMS's relationship with a leading global steel producer and reaffirms that steel producers globally are increasingly recognizing the benefits of outsourcing non-core services," said Raymond Kalouche, President and CEO. "We are pleased with these new contracts and look forward to continuing to support our customers with our world-class service globally. We will build on these successes by continuing to expand into new markets as we create value for our customers and shareholders."
The company also announced today that it has purchased a non-controlling interest in a joint venture that will provide mill services to one of Malaysia's largest steelmakers. These services under a contract with the steelmaker include metal recovery, slag processing and slag sales. "We are delighted to have established an initial presence in the growing and strategic Malaysian steel producing market, and we look forward to working with our new partners to provide state-of-the-art service to our customer," Mr. Kalouche said.
These new contract wins follow the 17 new contract wins announced in 2012 representing approximately $308 million of cumulative revenue over the terms of the contracts at expected production levels, with aggregate growth capital investments of approximately $37 million.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.