NILES, IL--(Marketwire - May 17, 2010) -  MFRI, Inc., (NASDAQ: MFRI) announced today that its Board of Directors has approved the establishment of an additional insulated pipe manufacturing plant to be located in Dammam, Saudi Arabia to better serve Gulf Cooperation Council (GCC), and nearby countries. The plant will be developed and operated by Perma-Pipe's subsidiary, Perma-Pipe Middle East, (PPME) in tandem with its existing plant in the United Arab Emirates.

A strategically located land site has been leased in Dammam Industrial Area and the detailed plant engineering and design is currently in progress. This new state-of-the-art manufacturing facility will serve the special requirements of the oil and gas industry as well as the rapidly growing market for district cooling networks in the Kingdom of Saudi Arabia, (KSA). Perma-Pipe Saudi Arabia, (PPSA), will feature Perma-Pipe's Xtru-Therm automated spray polyurethane insulation and several jacketing systems including Polyethylene, metal and FRP offering a comprehensive product range. PPSA will also be equipped to custom manufacture pipe spools and a complete range of pre-insulated fittings. The Company has received an industrial license and the required commercial registration and expects the plant to be fully operational in 2011.

"We eagerly anticipate this major strategic initiative, which will address the largest market in the GCC countries. Perma-Pipe Saudi Arabia will serve the KSA district heating and cooling and oil and gas markets in this important and rapidly growing economy. Furthermore, in conjunction with our facility in the United Arab Emirates, the company will be well-positioned to serve customers throughout the region," said Fati Elgendy, President of Perma-Pipe, Inc.

"The facility is within 20 miles of ARAMCO and very close to Qatar, Kuwait and Bahrain. PPSA fills in our Middle East expansion strategy. Perma-Pipe has successfully served Saudi Arabia since the 1970's and is currently supplying several major projects in the country from our UAE facility. Prominent among the projects currently being supplied in Saudi Arabia is the Princess Noura University, an entirely new university campus exclusively for women. Through PPSA we look forward to expanding our share of this very large market as well as adjacent areas in the GCC," said Avin Gidwani, President of Perma-Pipe Middle East.

"I am very proud of our accomplishments in the Middle East and the overall implementation of our business strategy at Perma-Pipe. We continue to reach new markets by providing outstanding customer service and best in class products at competitive prices. This investment further supports our plan for continued growth in rapidly emerging markets," said David Unger, Chairman and CEO of MFRI, Inc.

MFRI is a leading manufacturer of factory pre-insulated piping systems for oil and gas gathering, district heating and cooling and other specialty applications. Other MFRI products include custom-designed industrial filtration products to remove particulates from dry gas streams, thermal transfer equipment to remove heat from molding, printing and other industrial processes, and energy conscious heating and air conditioning systems for large buildings in the Chicago area.

For more information visit the Company's website or contact the company directly.

Statements and other information contained in this announcement which can be identified by the use of forward-looking terminology such as "anticipate," "may," "will," "expect," "continue," "remain," "intend," "aim," "should," "prospects," "could," "position," "future," "potentiall," "believes," "plans," "likely," "seems," and "probable," or the negative thereof or other variations thereon or comparable terminology, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 as amended and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, raw material availability and prices, global interest rates, currency exchange rates, labor relations and other risk factors.