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Trinity Tank Car weighs $44M growth

By Sherry Koonce
Nov. 5, 2012 at 11 p.m.

Trinity Tank Car, Inc. - one of Longview's largest employers - is researching plans to make a $44 million investment in the company during the next five years.

The company, according to information published by the City of Longview, plans to increase its tank car manufacturing capacity in response to higher demand that has resulted from a rise in the chemical, crude oil and natural gas markets.

Trinity produces a full line of tank cars that transport liquefied and pressurized commodities and owns and operates Longview facilities at 708 Jordan Valley Road, 1111 W. Harrison Road, 202 Progress Blvd. and 140 Shady Brook Lane.

The Longview facilities work together as one manufacturing unit, officials have said.

Trinity representatives have declined to comment on the company's expansion, but are asking for the city's support to participate in the Texas Enterprise Zone Program.

Inclusion in the program would allow Trinity to receive state tax incentives under the Texas Enterprise Zone Program.

A community must nominate a business for enterprise project designation.

"This is a very competitive round of grants," said Susan Gill, Longview Economic Development Corporation's executive director. "We are trying to help them work their way through the process."

Because the investment is spread out over five years, Gill said it was difficult to compare Trinty's investment in Longview to other companies.

"When Sysco Foods came in 2008 they spent $33 million; Dana was over $90 million in 2002, and LeTourneau (Technologies - now Joy Global) was over $25 million 2006-2007," Gill said.

According to information provided on the City of Longview's website, in July Trinity employed 807 employees, making it one of the city's top five employers.

Though Trinity officials have not said whether the upgrades would result in added jobs, the company has committed to retain the existing level of employment.

"I can't see them not adding jobs, but they have not yet indicated they would, or they would not, Gill said. "We are just thankful (Trinity) corporate is saying yes to investing in the Longview facility; this is a huge investment, and is excellent news for the region.

City and LEDCO representatives are planning to meet with Trinity personnel this week to discuss the proposal, Gill said.

Trinity Tank Car, Inc., is part of Dallas-based Trinity Industries. Tim Wallace, chairman, president and CEO. told analysts in late October the company experienced a good third quarter.

"We continue to see consistent demand for products that transport and store crude oil and other liquids related to the energy industry," Wallace told investors in published comments. "We continue to evaluate investments across our businesses to enhance our manufacturing flexibility."

Wallace said backlogs for Trinity's railcar and barge businesses totaled $3.9 billion at the end of the third quarter.

"The size of these backlogs gives our business leaders production visibility into 2014 for products that serve the oil, gas, and chemicals market," he said. "We are in the early stages of extended production runs for these products. Our businesses perform well when these conditions are present."

In the same conference call with analysts, Steve Menzies, senior vice president and group president for Trinity Rail, said the company continues to see steady rail car demand.

"Industry orders for new cars during the third quarter totaled 15,150 railcars, the eighth consecutive quarter of industry demand exceeding 10,000 cars," Menzies said. "This is quite impressive considering the weak economic growth the North American economy is experiencing."

The company received orders during the third quarter for 4,865 new railcars, bringing our total backlog to 31,330 railcars. This results in a 6 percent increase in the dollar value of the company's railcar order backlog from the prior quarter to an all time high of $3.3 billion.

"Many of our third quarter orders extend current production of certain railcar types into 2014," he said. Third quarter orders were primarily for tank and covered hopper railcars and came from industrial shippers and third party leasing companies, Menzies said.

"Oil and gas production activities and chemical market expansion are driving railcar demand," he said.



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