Some rail companies are investing in rail-siding projects to attract plastic processor customers.
CSX Transportation, for example, worked during 2000 with state and local economic development officials to facilitate the location or expansion of 17 plastics-related operations along its rail lines in 10 states.
Investment approached $168 million and created more than 1,100 jobs, CSXT said, and the new locations are expected to add 5,500 carload movements of plastics to the railroad's annual volume.
"Plastics companies can significantly reduce costs by buying in bulk," J. Randall Evans, CSXT vice president of real estate and industrial development, said in a statement. "One carload can carry the same amount of plastic resin as four truckloads. That saves plastics companies as much as 5 cents on a pound of resin."
CSXT has 16 pending plastics projects out of 300 active market developments, said David Hemphill, assistant vice president for industrial development in Jacksonville, Fla.
A majority of carloads go directly to customers, Hemphill said, and another 15-20 percent go through bulk distribution facilities. CSXT and third parties operate more than 100 sites for offloading plastics to a truck for final distribution.
Each year, the railroad sees increases in new and expanding plastics customers, Hemphill said in a telephone interview.
"We have targeted this area over the last three years through marketing and economic development initiatives, and we are trying to accelerate interest," he added.
CSXT gathered data on a variety of plastics-related investments needing rail sidings:
Nursery Supplies Inc. of Chambersburg, Pa., said it will invest $55 million to establish a 105,000-square-foot plant in Kissimmee, Fla., to manufacture plastic nursery pots. The firm purchased 25 acres for $4.2 million.
Coroplast Inc. committed to spend $15 million for acquisition of a 90,000-square-foot facility and construction of a 40,000-square-foot addition in Vanceburg, Ky. Production of corrugated plastic sheets for signs should begin in February. Coroplast secured a $692,000 community development block grant to construct a rail spur. Jim Pattison Group owns Dallas-based Coroplast.
TimberTech Ltd. was investing $17 million to manufacture plastic fencing and decking in Wilmington, Ohio. TimberTech is a subsidiary of Crane Plastics Holding Co.
Louisiana-Pacific Corp. subsidiary LP Specialty Products established a plastic-wood manufacturing facility in Selma, Ala., investing $9 million and possibly as much as $40 million eventually. The plant opened in mid-2000. The unit formerly was known as ABT Building Products Co.
Other rail-siding uses were logged in Bowling Green and Perrysburg, Ohio, and Madisonville, Ky.
Several Bowling Green developments occurred since the June 1999 integration of key portions of the Conrail Inc. rail system into CSXT. Parent CSX Corp. of Richmond, Va., and Norfolk Southern Corp. of Norfolk, Va., jointly own Conrail.
CSXT's addition of a Flexi-Fleet service aims to move packaged chemicals and plastics in specially designed boxcars in closed loops between plants and distribution centers or other high-volume destinations. The CSXT service competes with cargo now moving in trucks.
CSXT, the East's largest railroad, employs 35,000 and provides rail transportation and distribution services over a 23,000-mile network in 23 states, the District of Columbia and two Canadian provinces.
Bowling Green sites
Bowling Green has attracted four plastics processors with present or future use for rail sidings since mid-1999.
The businesses include operations of Owens-Illinois Inc., Southeastern Container Inc., Pinnacle Plastic Products and Toledo Molding & Die Inc.
"We identified good sites and marketed them," Susan Clark, executive director of the Bowling Green Community Development Foundation, said in a telephone interview. "We zoned correctly and had rail accessibility" via CSX Transportation.
Bowling Green is a typical established community. In many cases, properly zoned areas where sidings might go were developed in the 1920s and 1930s and are no longer viable for rail access, Clark said.
In addition to the usual tax incentives, foundation leaders created a rotating fund to allow the nonprofit organization to buy and resell land for development.
Bowling Green opted to pursue the concept of a community rail siding. The first effort is designed with two rail sidings and an access road. The shortage of suitable industrial sites prompted leaders to consider other multi-tenant community rail sidings.
"We hope to build two sidings in a year for companies already here or to attract other companies," she said.
Engineering is nearing completion with construction of the first siding expected in the March-June time frame, Clark said. CSXT will build the first 150 feet of track, and the foundation will contract for the remaining 510 feet.
An Owens-Illinois unit has taken a 10-year lease on the dedicated siding. O-I is investing $16 million to construct a 189,000-square-foot Bowling Green plant that will replace a factory 13 miles away in Maumee, Ohio.
The new facility will employ about 125, up from 100 in Maumee, and produce bottle caps and other plastic components. Facility construction began in September, and operations should start by May.
Southeastern Container opened a 100,000-square-foot blow molding facility in Bowling Green in 1999 and added 70,000 square feet for injection molding last year. All raw materials arrive by rail.
The Bowling Green plant focuses principally on supplying PET soft drink bottles and preforms to Ohio and Michigan bottlers. Enka, N.C.-based Southeastern is a multiple-plant supplier to Coca-Cola Co. affiliates.
Custom blow molder Pinnacle Plastic Products is constructing a siding for full-car delivery of resin, mostly high density polyethylene, to a new high-capacity silo. A smaller silo is in use now.
Pinnacle moved into a 90,000-square-foot facility in October 1999 from a leased plant on the opposite side of the tracks.
"We were in a building on one side of the railroad tracks and the siding [access] was on the other side," said Gary Gratop, vice president and chief financial officer.
Pinnacle employs almost 90 and makes plastic toys, juvenile furniture and household products. "As we've added machines, resin use goes up," he said. The 5-year-old business was incorporated as Pinnacle Industrial Enterprises Inc. but operates under the trade name Pinnacle Plastic Products.
A Toledo Molding & Die division opened a new Bowling Green plant adjacent to the CSXT line in 1999 after operating from a temporary location elsewhere in the city. Installation of a siding is "probably a couple years away," said Tom Pasche, plant manager.
The plant blow molds automotive heating, ventilation and air-conditioning ductwork and is starting production of automotive fluid reservoirs. The company is based in Toledo, Ohio.
A Rexam plc unit is installing a rail siding for a new highly automated injection molding facility in Madisonville, Ky. Plant construction began in November, and cap and closure production should start in July.
"We have a contractor installing our siding through our engineering group," said Bill Weinert, purchasing manager in Evansville, Ind., with the closures division of Rexam's beauty and closures sector.
Short line Indiana Southern Railroad will serve as a link between the 190,000-square-foot Kentucky plant and a CSX Transportation line. The goal: fulfill the plant's requirements for resin, mostly PE and polypropylene.
Weinert ranked rail access with tax incentives and geographic location among factors in selecting a plant site. Madisonville is the division's fifth plant. Rexam plc is based in London.
The Schutz system
Schutz Container Systems is duplicating its rail unloading system for a second plastics processing plant in Perrysburg, Ohio. Construction of the 85,000-square-foot facility began in October and should conclude in April.
Schutz will relocate its blow molding equipment for making international bulk containers to the new site. Nearby, the existing 120,000-square-foot plant will retain production of 30-gallon to 55-gallon drums.
Fast-growing Schutz has used truck and rail in the past but is moving toward only using rail cars to receive resin, mostly high density PE.
"With the volume now, we would have an almost constant flow of trucks," said John Evanski, a plant engineer. "Truck traffic kills us."
Rail is cheaper and can carry larger loads, and Schutz can control unloading from a rail car on its siding, he said. Schutz does not own the siding but, as the sole user, is responsible for track maintenance. The plants are near a CSX Transportation line.
Parent Schutz Group of Selters, Germany, is making Perrysburg's fourth blow molding machine. The new machine and another each use a 40-liter head for molding bulk containers. Two machines with 30-liter heads make the drums.
Volume polymer handler AgriNutrient Inc. of Disputanta, Va., uses a siding with access to Norfolk Southern Corp. lines and is contemplating a second rail siding this summer for another facility. Tentatively, the company plans to double its capacity.
CSX Transportation may serve the second siding, said Vice President Joe Woody.
The toll and contract business, AgriNutrient, operates under the trade name Ancos. The company uses rail services for inbound and outbound freight and has proximity to ocean shipping terminals.
The company employs 50 and blends minerals for use as thermoplastic fillers. The company's equipment includes tumble blenders and high-intensity mixers. Processes include drying, scalping, repacking and homogenizing.
"We do everything other than extrusion or compounding," Woody said.