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Mine Safety Appliances building factories abroad

| Wednesday, Oct. 18, 2006

Mine Safety Appliances Co. is opening new factories close in its fastest-growing markets so that it can price its products more competitively, executives said Tuesday.

The O'Hara-based company is shifting labor-intensive production from "higher-cost" countries to "lower-cost" countries, Vice President Kerry Bove told analysts at Mine Safety's Cranberry facility during the company's first Investor Day for the financial community. The company is building factories in Mexico and China, Bove said.

CEO John T. Ryan III said he and a large part of the company's work force are within 10 years of retirement. As employees retire from Mine Safety's U.S. facilities, the company will likely shift jobs to plants in growing markets, he told the analysts.

Bove, vice president for operational excellence, said afterwards that there's no plan to reduce jobs in Western Pennsylvania.

"Right now we've having good growth in products made in the United States and in Western Pennsylvania in particular," he said.

Mine Safety employs about 4,500 worldwide, including about 2,300 in North America. It employs about 1,500 workers at four locations in Western Pennsylvania, including Murrysville, Westmoreland County, Cranberry and Evans City in Butler County, along with about 300 people at its headquarters in the RIDC Park in O'Hara.

Bove said a new factory at Suzhou, China, will mainly fill equipment orders in China. The company's 2005 annual report says instrument sales jumped 52 percent in China while equipment sales to China's oil, gas and petroleum segment increased 61 percent. Not counting the new factory, Mine Safety Appliances has expanded its manufacturing capacity 70 percent.

Executives said Mine Safety's concentration on high-tech safety devices such as gas detectors, ballistic armor and firefighting helmets will allow it to grow faster than the overall safety market. The industry has seen a boom since 2001 due to increased military and homeland security spending on safety devices and armor following the Sept. 11 terrorist attacks.

The boom slowed down this year due to Congress delaying funding for firefighter grants and the military placing fewer new orders for armor and other equipment, officials said. Ryan said the company anticipated the shift and is expanding its product lines to maintain growth.

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