Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 10, 1993 TAG: 9311100005
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: DOUG LESMERISES STAFF WRITER
DATELINE: LENGTH: Medium
Pocahontas Land Corp. and International Lumber Inc., a subsidiary of International Industries Inc., have started construction on a mill in Gilbert, W.Va., that will produce crossties for the railroad. The $2 million plant is expected to be completed in March.
"It's a win-win situation for Norfolk Southern, West Virginia and our partner," said Larry Moore, purchasing director for NS.
It's the second joint venture for the two companies. They joined earlier this year to open a lumber mill in Cabin Creek, W.Va.
The 42,500-square-foot mill will produce about 10,000 ties a month.
Typical untreated ties sell for $16 to $18 each. The ties are 7 inches by 9 inches by 8 1/2 feet long.
The mill will employ about 12 workers. Twice that many jobs could be created for contract loggers and haulers.
The ties will be finished at the Koppers Treating Plant in Salem. Koppers has finished ties Norfolk Southern bought from other sources. Treated ties cost about $25.
Rising lumber prices encouraged Norfolk Southern to explore opening a plant of its own seven months ago.
"From September of last year, untreated ties have gone up 40 percent in price," Moore said.
Norfolk Southern will now have more control over its own destiny in the volatile market.
"We were looking at ways to improve our situation," Moore said, "and the logical thing was to use some of our own resources."
More than half the trees cut for the operation will come from Pocahontas-owned land.
The railroad uses between 1.6 million and 2 million ties a year and as much as 15 percent of that demand will be met by the Gilbert plant.
The plant also will produce boards, chips and bark that are readily salable and will provide a small profit for the company.
"We look at it as an opportunity," Moore said. "If it works out, we may look for other opportunities. We'll see how things go."
by CNB