Composite railroad-tie manufacturer Axion International Holdings Inc. of New Providence, N.J., has signed a $15 million contract with a railroad company.
Officials did not disclose the name of the railroad but said it is a Class 1 railroad in North America that has agreed to a minimal purchase of $5 million composite railroad ties annually. Axion has operated through contract manufacturing. The new contract means that Axion will begin using an additional manufacturer.
We are in the process now of tooling up an additional manufacturing facility, Axion CEO Steve Silverman said in a Feb. 8 telephone interview. We will go through one additional manufacturer.
To date, Axion has been a spot manufacturer. The company has produced ties in quantities of 30,000-40,000 at a time.
This contract will allow us to run machines 365, 24/7, Silverman said. The company has an active pipeline of projects, including reorders from existing customers and new customers coming on board.
The contract is the latest in a series of changes for Axion, now publicly traded on the over-the -counter securites market. The company just appointed Silverman to the CEO post in addition to his role as president. Silverman formerly was president and chief operating officer. He replaces Jim Kerstein as CEO. Kerstein will focus on his role as chief technology officer. The company also now has four board members, including Anthony Hatch, a veteran railroad industry analyst.
Axion has entered its market-driven phase to capitalize on the work that everyone has done, Silverman said.
The last three years for Axion has been about proof of concept, development, manufacturing, and making sure the product is right, he said. We've got great test data, great proof of concept. Now it's about getting information out to the masses.
That effort will include expansion into international markets. Earlier this year, the company completed an installation of railroad ties with ONCF, the national railway of Morocco.
In its annual report filed with the Securities and Exchange Commission, Axion management said it is in discussion with officials and other organizations within South America, Russia, China, France, India, Mexico and the Caribbean Islands.