New Plastic Resin Packaging Facility to Benefit BNSF

(BRK.A), (BRK.B)

Projected skyrocketing demand for plastic resin has BNSF Railway, resin packaging firm Packwell Inc., and real estate developer Hillwood proposing to build a plastics export packaging facility in North Fort Worth.

The facility will be located at the AllianceTexas development, Hillwood’s18,000-acre master-planned, mixed-use community located in north Fort Worth.

AllianceTexas offers a variety of commercial real estate options, including new industrial, office and retail space, and is anchored by the multi-modal inland port known as the Alliance Global Logistics Hub.

According to the trade association, the American Chemistry Council, export demand for plastic resin will grow dramatically over the next four years, with the demand level of $6.5 billion in 2014 increasing three-fold to $21.5 billion by 2020.

The boom in U.S. resin production is due in part to cheap natural gas available in Texas.

“The advantage of a facility at AllianceTexas is that it offers superior rail connectivity, access to the largest array of ocean steamship lines, and we can deliver the facility to Packwell in time to support the rapidly increasing demand,” notes Hillwood President Mike Berry.

Packwell is already one of the largest resin bagging companies in North America with over 160 thousand square meters of warehouse facilities.

The new facility will allow bulk hopper cars of plastics resins to arrive by BNSF trains from Houston where they will be packaged for shipping. After packing the shipments will again be moved by BNSF to steamship lines that operate between the BNSF Alliance Intermodal terminal and Asia via West Coast ports in Los Angeles, Long Beach and Oakland, California.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.