GE Oil and Gas planning investment to better meet well production equipment demand

Source:GE Oil & Gas

GE Oil and Gas planning investment to better meet well production equipment demand

Seeking to improve and sustain its manufacturing capabilities to meet the growing demand for oil and gas production and power transmission equipment, GE Oil & Gas (NYSE: GE) today announced it plans to invest $60 million in expanding and modernizing its foundry operations in Lufkin, Texas. The Lufkin foundry produces industry-leading iron castings used to make renowned Lufkin beam pumping units and Lufkin power transmission equipment.

GE plans to demolish 30,000 square feet of its existing 515,000-square-foot facility and construct 72,000 square feet of new buildings. The company also plans to refurbish the remaining facilities at the site in Angelina County.

The facility upgrades will create a simplified production process flow, improve employee working conditions and provide GE’s customers with improved quality and delivery schedules.

The Lufkin foundry originally began operating in 1902. While there have been various upgrades to the foundry throughout its history, this proposed investment would infuse the site with modern technology and practices to reduce emissions and boost production efficiency in an increasingly competitive global marketplace.

“We chose to invest in modernizing and improving our existing foundry because of the rich history and dedicated, skilled workforce associated with the Lufkin operation here in Texas,” said Jerome Luciat-Labry, president of Well Performance Services for GE Oil & Gas. “The goal is to make the facility as efficient as possible and help strengthen the competitive position of our business around the world. We are excited about continuing to support manufacturing jobs in the United States and especially here in Angelina County where Lufkin Industries began.”

“By having its own foundry, GE Oil & Gas has a strategically integrated supply chain that allows the company to more rapidly meet the needs of its customers, particularly in the fast-growing unconventional oil and gas sector,” said Luciat-Labry.

Design work for the project is expected to begin in 2014. As currently proposed and pending government approvals and permits, construction would be carried out in four phases commencing in 2016. Under that schedule, construction is expected to be complete in about three years.

The foundry manufactures gray and ductile iron castings, producing an estimated 72,000 tons of products each year. About 87 percent of the foundry’s products are used to supply GE’s own Lufkin factories while the remainder is sold externally to other customers.

The modernization of the Lufkin facility is expected to keep the foundry operating for generations to come and continue to provide jobs in the local economy.

GE’s planned $60 million investment reflects the company’s continued commitment to the Lufkin business and community. These renovations will not only improve safety and efficiency, but also will allow the foundry to continue operating for the foreseeable future.

In 2013, GE announced it completed its acquisition of Lufkin Industries for approximately $3.3 billion. The move broadened GE Oil & Gas’ artificial lift capabilities with solutions for a wider variety of well types and technology for production automation and optimization in the drilling industry. GE has invested more than $85 million in the Lufkin business globally since the acquisition.

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