North American Technologies Group Inc.'s train may be coming in.
The maker of composite railroad ties announced Jan. 23 it has raised $2.4 million in debt and equity as it looks to ramp up production capacity as a result of landing an order from Union Pacific Railroad valued at more than $55 million.
``In order to get it, we needed to raise everything we could,'' said Henry Sullivan, president and chief executive officer of the firm, known as NATK. ``These are not good economic times. If you don't have the money you can't get the order, and if you don't have an order you can't get the money.''
The order for 1 million ties, which NATK received late last year, comes as part of a six-year supply agreement with the largest railroad in North America, he said.
``We told them where we stood and they said, `If you make the commitment, we'll get it done,' '' Sullivan said.
Union Pacific spokesman John Bromley said the company is encouraged with the performance of the ties.
``The ties are located in the southern region of the railroad where we have damp weather,'' he said. ``It can be a very difficult environment for wooden ties and concrete ties as well.''
With three months left in its fiscal 2002, NATK had reported a loss of $925,531 on sales of $1 million. Its loss through three quarters a year ago was $2.35 million on sales of $1.15 million.
NATK is going to add a second line at its plant, which will allow it to produce more than 200,000 ties annually by next year. Currently, the Houston firm produces 100,000 annually. Sullivan said NATK is hoping to add to its 25-member work force there by the end of next year.
Also helping NATK's cause is Oklahoma City-based Kerr-McGee Chemical LLC's exit from the wood tie-manufacturing business. Sullivan said Kerr-McGee had accounted for about a quarter of the tie market.
``We're kind of looking forward to being an overnight success after beating our brains out for nine years,'' he said.