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Abakan Contracts To Build Large-Scale Clad Pipe Facility In Brazil

MIAMI, April 8, 2013 (GLOBE NEWSWIRE) -- Abakan Inc. ( OTCQB: ABKI) ("Abakan"), an emerging leader in the advanced coatings and metal formulations markets, today announced that it has entered into a memorandum of understanding with Cone S.A. for construction of a manufacturing facility to suit large-scale clad pipe manufacture inside the new Suape Export Processing Zone ("Suape EPZ") in Pernambuco State, Brazil. The facility will help meet the demand for corrosion-resistant clad pipe to enable the safe and efficient production of oil in Brazil, where more than 80 percent of oil fields are highly sour.

The large-scale, 4-line clad pipe manufacturing plant will be capable of producing up to $200 million of clad products annually. The decision to establish a plant in Brazil was driven by the requirements of Abakan's technology development partner, Petrobras, along with anticipated demand from other Brazilian energy and mining companies that have expressed interest in Abakan's cladding solutions as a means of reducing capital and operating costs in some of the world's most challenging corrosive and abrasive environments.

"This plant will be one of the world's largest metallurgical clad pipe manufacturing facilities, with the capability of quickly producing large quantities of corrosion- and/or wear-resistant clad pipe," said Robert Miller, Abakan's CEO. "The increased demand in Latin America and worldwide for clad pipe to deliver sour crude oil and gas from new and expanded projects such as the Brazilian and West African pre-salt reserves and the Gulf of Mexico, has us very excited about the growth potential for our clad pipe in markets that can easily be reached from this Northeastern Brazil facility."

Cone (Business Condominium) is an initiative of Conepar – Moura Dubeux Engineering shareholders with an Infrastructure Fund (FI/FGTS) managed by the Caixa Econômica Federal, the largest government owned bank in Latin America. Cone has formed a strategic alliance with FCL Builders, headquartered in Itasca, Ill., to bring its significant industrial construction expertise to this partnership. Over 35 years, FCL Builders has been acknowledged as one of the premier design/build contractors of industrial facilities in the United States. Architectural drawings are finalized and permitting for the site has started, land preparation is slated to begin next month and the foundation will be completed in July. Abakan plans to start the installation of its specialty equipment by December.

The facility will be built on 1.6 hectares (four acres) inside the Suape EPZ together with an adjacent storage area. The EPZ offers exemptions from import and export taxes on equipment, materials and operations, with special financial privileges and tax incentives. The Suape EPZ is Brazil's first privately administered export processing zone.

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