Mueller Water Products Consolidates and Expands

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Researched by Industrial Info Resources (Sugar Land, Texas). Several big changes are in the works for Mueller Water Products, LLC. Currently, subsidiaries of Walter Industries (NYSE:WLT)(Tampa, Florida), Mueller Company, U.S. Pipe & Foundry, Henry Pratt Company, and other Walter Industries foundry-related subsidiaries are being spun off to form Mueller Water Products, LLC. When the deal is finalized, by the end of the year, Mueller Water Products, LLC will be a stand alone entity and plans to be in its new headquarters in Atlanta, Georgia.

The company is in the process of consolidating and eliminating unprofitable manufacturing plants. Earlier this year, the U.S. Pipe & Foundry subsidiary closed its Chattanooga, Tennessee valve and hydrant foundry and is shifting production to sister foundries in Chatanooga, and Albertville, Alabama. Henry Pratt will close its Dixon, Illinois valve foundry by the end of 2006 and shift production to other Henry Pratt plants in Illinois and Indiana.

Probably the best news coming out of the company is the decision to expand pipe manufacturing capacity in the U.S. instead of locating manufacturing capacity overseas. The company will build a new state-of-the-art centrifugal cast ductile iron pipe foundry near one of its existing foundries in the Birmingham, Alabama area. U.S. Pipe operates two pipe foundries employing 1,000 in the area, one in Birmingham, and the other in Bessemer, a suburb of Birmingham. The Birmingham area won out over China, bucking a nationwide trend, which has seen companies close U.S. operations and relocate outside of the U.S. significantly reducing the U.S. manufacturing base. U.S. Pipe is evaluating property adjacent to both facilities for the new plant and should make a site decision by the end of 2006. Construction is scheduled to begin in the spring of 2007. The new foundry will not require a new meltshop, as it will utilize molten iron from one of the existing foundries to feed a new highly automated casting and finishing line.

The announcement of this project in Birmingham is an example of the resurgence of the iron and steel industry in the Southeastern U.S. Birmingham, once known as the steel capital of the South, had experienced downsizing of the industry in the area as several companies, including Gulf States Steel and Birmingham Steel, went bankrupt and closed during the last wave of steel industry downsizing.

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