Pittsburgh, PA – April 29, 2003 – Allegheny Technologies Incorporated (NYSE: ATI) announced the formation of Uniti LLC, a joint venture with Russian-based VSMPO-AVISMA (Verkhnaya Salda Metallurgical Production Association – Berezniki Titanium-Magnesium Works) to produce and market a range of industrial commercially pure titanium products. Uniti’s target markets include chemical and petroleum processing, power generation, desalination, pulp and paper, construction and architecture, automotive and transportation, consumer and electronics. The joint venture will not be involved in commercial aerospace, military and medical markets. The joint venture is headquartered in Pittsburgh, PA.
Uniti integrates the synergistic use of the raw material, melting, hot rolling, finishing, research and technology resources of ATI and VSMPO-AVISMA. Uniti supplies a broad array of titanium products and is dedicated to enhancing customer service and developing new applications in the target markets for this lightweight and corrosion-resistant material.
James L. Murdy, president and chief executive officer of Allegheny Technologies said, “We are very pleased to be partnering with VSMPO-AVISMA in the pursuit of these titanium markets. Titanium has been growing in use in a variety of applications and Uniti should significantly accelerate this growth. This pro-competitive joint venture should permit Allegheny Technologies to increase our production of high-value products. Utilizing existing advanced manufacturing technology, ATI can produce these titanium products on the same equipment used for stainless steel, nickel-based and specialty steel alloys. The joint venture should offer ATI considerable revenue and income growth potential, particularly in our Flat-Rolled Products segment. Both ATI and VSMPO-AVISMA will continue to supply the commercial aerospace, military and medical markets independently.”
Dr. Vladislav Tetyukhin, president and chief executive officer of VSMPO-AVISMA said the following on this matter, “While we are currently going through a downturn in titanium production, we should not forget about the great future for titanium, and about the tremendous opportunities it can bring to humanity. In this difficult time we need to focus our efforts to accomplish this objective. In my opinion, multilateral cooperation and partnership of the two diversified companies, who each have almost half a century of experience in titanium production, is the key to success in achieving the goal set forth.”
Titanium product forms offered by Uniti include ingot, slab, sheet, strip, plate, billet, bar, seamless tubing and welded tubing. In 2002, titanium shipments to the target markets were approximately 45 million pounds with a total market value of about $400 million. A majority of these shipments were sheet, strip, plate and welded tubing products.
Carl Moulton has been named president of Uniti. Most recently, he was assistant vice president, strategic initiatives for Allegheny Technologies and prior to that he was senior vice president, commercial for Allegheny Ludlum, an ATI company. He has over 30 years of experience in the specialty materials industry. Moulton said, “We created Uniti to be a unique, competitive and customer-responsive company that is able to satisfy a broad array of needs of the industrial titanium user. Semi-finished products from VSMPO-AVISMA, such as slabs and hot-rolled bands, are to be positioned near ATI’s finishing facilities in order to supply the shortest, most reliable lead times in the industry. Extensive technology assets from each partner are available to aid our customers’ product development efforts.”
Uniti expects to begin taking orders on June 1, 2003. Prior to that time, customers in the target markets should contact their normal sales representatives at either ATI or VSMPO-AVISMA.
Manufacturing of Uniti products will be done through conversion agreements with VSMPO-AVISMA and ATI. In this innovative arrangement, ATI and VSMPO-AVISMA will each retain ownership of their respective facilities made available to Uniti. VSMPO-AVISMA and ATI will market and sell these joint venture titanium products exclusively through Uniti. Plans are for production to occur in Russia at VSMPO-AVISMA facilities in Verkhnaya Salda and in Berezniki, Perm Region. ATI’s facilities involved in production are located in Houston, PA, Washington, PA, Vandergrift, PA, Monroe, NC, Richburg, SC, Albany, OR and Richland, WA. On agreement of the parties, additional capacities can be added for production in any region of the world.
This news release contains forward-looking statements. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in Allegheny Technologies Incorporated’s filings with the U.S. Securities and Exchange Commission.
Uniti brings together two major global titanium producers with complimentary manufacturing and technical capabilities, Allegheny Technologies Incorporated (ATI) of the United States, and VSMPO-AVISMA (Verkhnaya Salda Metallurgical Production Association – Berezniki Titanium-Magnesium Works) from Russia, to create a joint venture focused on titanium mill products for industrial and other non-aerospace, non-military and non-medical markets. Uniti integrates the synergistic use of the raw material, melting, hot rolling, finishing, research and technology resources of the two companies. Uniti is a supplier of a broad array of commercially pure titanium products for target markets in ingot, slab, plate, sheet, coil, bar, billet, welded tubing and seamless tubing. Uniti is dedicated to enhancing customer service and developing new applications in target markets for this lightweight and corrosion-resistant material. These target markets include chemical and petroleum processing, power generation, desalination, pulp and paper, construction and architecture, automotive and transportation, consumer and electronics.
Allegheny Technologies Incorporated is one of the largest and most diversified specialty materials producers in the world, with revenues of approximately $1.9 billion in 2002. The Company has approximately 9,650 employees worldwide and its talented people use innovative technologies to offer growing global markets a wide range of specialty materials. High-value products include nickel-based and cobalt-based alloys and superalloys, titanium and titanium alloys, specialty steels, super stainless steel, exotic alloys, which include zirconium, hafnium and niobium, tungsten materials, and highly engineered strip and Precision Rolled Strip® products. In addition, we provide commodity specialty materials such as stainless steel sheet and plate, silicon and tool steels, and forgings and castings. The Allegheny Technologies website can be found at www.alleghenytechnologies.com.
Verkhnaya Salda Metallurgical Production Association (VSMPO) – Berezniki Titanium-Magnesium Works (AVISMA) is a producer of ingots of commercially pure and alloyed titanium and a complete range of rolled, extruded and forged products from titanium, aluminum and special steel alloys. JSC AVISMA is a leading titanium sponge producer. The plant produces magnesium and high-quality titanium sponge widely used for aerospace, shipbuilding, gas and oil equipment, power generation, and also titanium sponge for special alloyed steel. VSMPO-AVISMA Group develops and applies the most advanced technical processes and is constantly modifying its production facilities to meet all the most demanding requirements of worldwide customers. VSMPO-AVISMA Group holds 187 international quality certificates and cooperates with 240 international companies from 33 countries. The primary business of VSMPO-AVISMA Group is the production of materials for the high-tech fields of aerospace, energy, chemical and environmental industries. The VSMPO and AVISMA websites can be found atwww.vsmpo.ru and www.avisma.ru.