Mexico's Ferromex Buys More Railroad Cars To Transport Crops
July 15 2011 - 1:37PM
Dow Jones News
Mexican railroad company Ferromex said Friday that it is
increasing its capacity in response to rising demand for crops, and
in anticipation of a rebound in agricultural production during the
2012-2013 season.
Ferromex, which is controlled by mining and railroad concern
Grupo Mexico SAB (GMEXICO.MX), is investing $56.5 million in 775
new high-capacity hopper cars, which it is acquiring through
October from the U.S. railroad car manufacturer Trinity Industries
Inc. (TRN).
The cars are already being incorporated into the Ferromex fleet
to help transport this year's wheat, corn and sorghum harvests,
which were damaged by freezes and drought in northwestern states.
Demand for those crops is expected to be at its peak in July and
August.
Ferromex said the government estimates that production of the
three crops will be more than 3.15 million tons between May of this
year and April 2012. For Ferromex, that represents more than 35,000
carloads. The capacity of the new railroad cars, which are built at
Trinity's plant in northern Mexico, is 5,250 cubic feet.
"The new equipment that is already being incorporated into the
Ferromex fleet will allow the company...to increase the railroads
role in moving the crops," Ferromex said.
Between May 2010 and April 2011, Ferromex transported 46,500
carloads, and the company expects volume for the upcoming season to
be higher than this year's.
Earlier this year, Ferromex maintained last year's freight
tariff rates for producers in Baja California, Sonora, Sinaloa and
Nayarit to ease the burden on them after weather damaged their
crops. In 2010, agricultural freight represented 34% of the
company's total revenue and 23% of carloads.
-By Jean Guerrero, Dow Jones Newswires; (5255) 5980-5180,
jean.guerrero@dowjones.com
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