With big new contracts in hand to provide concrete railroad ties for Union Pacific Railroad lines across the country, Spokane Valley-based CXT Inc. is spending $18 million to expand its plant in Nebraska and to build a new plant in Arizona.


The company, which through two divisions currently employs about 140 people at its two plants here and another about 105 at plants in Grand Island, Neb., and Hillsboro, Texas, plans to add about 50 more workers once the new facility in Tuscon, Ariz., opens early next year.


One of CXTs divisions produces the prestressed concrete railroad ties used by UP and other rail companies, and is expected to generate between $25 million and $30 million in revenue this year, says Dave Millard, vice president of that division. The other division manufactures precast concrete buildings, primarily outhouses for the U.S. Forest Service and other government agencies. That division expects sales this year of between $15 million and $20 million, says Dave Steiger, vice president and general manager of the divisions two plants.


Its the new contracts with UP that are triggering the expansion push.


Within the next five to eight years, the big Omaha, Neb.-based railroad company plans to replace wooden rail ties with CXTs concrete ties on its major rail routes between Salt Lake City and Chicago and between Los Angeles and El Paso, Texas. Also, on portions of those same two routes where only one rail line now exists, UP plans to build new second lines with concrete ties manufactured by CXT, says Millard. With six- and eight-year contracts secured with UP to provide concrete ties for those two projects, CXT has launched a renovation of its concrete tie plant in Nebraska, at a cost of about $8 million, and also is constructing a $10 million plant in Tuscon to meet the increased demand.


Moreover, Millard believes CXT could see more growth in the future.


Although 90 percent of all railroad ties in Europe and Australia are concrete, most rail ties used in the U.S. and Canada are still wood, he says.


Prestressed concrete ties are not yet considered to be the standard for railroads in the U.S. and Canada, Millard says.


CXT Inc. is a wholly owned subsidiary of Pittsburgh-based L.B. Foster Co. CXTs two plants here, one for each of its two divisions, are located about two miles apart near Sullivan Road. CXT Rail Products is located in a 55,000-square-foot building at 2420 Pioneer Lane, just east of Sullivan, while CXT Precast Products occupies a 120,000-square-foot building at 3808 N. Sullivan, inside the Spokane Business and Industrial Park.


Each of the two plants here currently employs about 70 workers, though the Precast Products plants employment peaks at about 100 workers at times, due to seasonal demand for outhouses.


Sales, engineering, accounting, and management for the two divisions are coordinated out of Spokane.


The two divisions are operated primarily on an independent basis, although the precast division uses the rail divisions computerized concrete batch plant as its source of concrete.


CXTs future here


While regional demand for CXTs precast buildings has been growing steadily since that division was launched in the early 1990s, the market for railroad ties is increasingly outside of this region, says Millard, so, The challenge is to maintain the (rail-tie) operation in Spokane Valley.


When CXT moved to Spokane in 1987 from Edmonton, Alberta, its primary focus was to make concrete ties for Burlington Northern Railroad lines in the Pacific Northwest and Wyoming, and for UP rail lines in the Blue Mountains of Oregon, in Northern California, and in Wyoming. Those two large rail companies continue to buy concrete ties made in Spokane Valley for installation within a 750-mile radius, but CXT now is expanding its customer base, and the destinations for its products.


Last year, CXTs Spokane Valley rail-tie plant sold ties and rail crossings to about 15 different customers, and, says Mark Hammons, territory sales manager, manufactured about 40 different types of ties to meet customer needs.


Because Spokane is our one plant without a long-term contract, were converting it into more of a specialty plant, or job shop, Millard says. Were changing Spokane from a high- capacity plant to a more specialized plant. We want to be a low-cost, competitive producer with a lower volume base.


Until the early 2000s, CXTs Spokane Valley rail-tie plant produced about 500,000 ties annually, says Millard. That number now is down to about 200,000 ties, he says.


Concrete railroad ties vary in weight, type of fastening component (which CXT also makes) used to connect the rail to the tie, and strength. The average tie weighs between 600 and 725 pounds.


The rail-tie plant here has three, 600-foot-long production beds made of steel where batches of concrete are poured into forms that produce specific shapes to carry rail lines as a customer needs. Attachments that later are used to secure the rail to the ties are imbedded as the concrete cures.


Long blocks of cured concrete are then stripped from the forms, cut to length into individual ties, and mechanically lifted from the bed in six-tie units for shipment by truck or rail to their intended destination, says Hammons.


Although cement is in dramatically short supply nationwide, Millard says CXT gets all the cement it needs from Overland Park, Kan.-based Ash Grove Cement Co.s cement plant in Montana City, Mont.


The U.S. does not have enough cement production capacity and relies heavily on the Far East, Japan, and Korea, says Millard. We in the cement industry are very concerned.


Other rail plants


Opened in 1998, CXTs rail-tie plant in Grand Island, Neb., was closed temporarily in mid-July to install new technology and equipment, and is expected to be back on line with a far greater production capacity in November, Millard says. Because it will be using a more efficient technology, he says the plant will be able to produce many more ties with the 50-employee work force it has there.


Meanwhile, the companys planned new plant in Tuscon, Ariz., is in the final stages of the permitting process, Millard says.


We have already bought the equipment, are on a very aggressive schedule, and are expecting tie production to begin (there) early in 2006, he says. That plant, too, is expected to employ about 50 people.


Prestressed concrete railroad ties became popular in Europe after World War II when wood to build standard ties became scarce, says Millard.


Still, concrete ties have yet to catch on in a large scale in North America.


We have to try and convert the railroad industry to this technology, Millard says.


About 18.5 million railroad ties are installed annually in the U.S. and Canada, but only about 1.5 million of that total are made of prestressed concrete, he says. Millard argues that concrete ties last longer, require less maintenance, and, at about $60 a tie (including fasteners), are comparably priced with their wooden counterparts. He also asserts that because prestressed concrete can take additional weight, it takes 20 percent fewer concrete ties than wooden ties to support the same length of railroad track.


One knock against concrete ties is that they cant be used as replacement ties on an individual basis when a wooden tie goes bad, because the ground preparation requirements are different.


To use concrete, you have to take out all the wood, Millard says. He says concrete ties often are used now for new lines of track in the U.S. and Canada, but the highest percentage of tie installations are replacements on existing wooden tie lines.


Precast outhouses


CXTs precast building plant saw its volumes grow considerably more when that segment of the business was relocated from CXTs tie plant into its own facility on Pioneer Lane just before L.B. Foster bought the company in 1999, Steiger says.


The precast division builds structures for both vault toilets and flush units, the latter of which it equips with sewer and electrical wiring. They are made primarily in 26-foot-by-10-foot sections, with each building ranging from one to five sections and each section weighing up to 80,000 pounds. The buildings are built with concrete poured into forms. The sections then are moved along an assembly line on tracks, are assembled, plumbed and wired, then are broken down and shipped by truck to the installation site.


There, subcontractors prepare the pad for the building and, using a crane, usually have the structure in place and functional within one to three days.


Variations of the buildings also can accommodate storage, showers, concession stands, and separate mens and womens restrooms, says Steiger.


The pre-fabricated restrooms and outhouses are shipped to customers all over the continental U.S., Hawaii, Alaska, and Guam, says Gary Burger, national sales manager for the precast division.


The buildings are priced from $12,000 for a basic, one-section vault unit, to up to $130,000 for larger, multi-section flush units.


Steiger says the Spokane plant and Hillsboro plant, which seasonally employs up to 70 workers and currently employs 55, produce about 300 pre-fabricated restrooms a year.


L.B. Foster was CXTs third largest customer when the Pittsburgh concern bought CXT, for about $20 million, six years ago. L.B. Foster has been in business for more than a century and has annual revenue of about $300 million, Millard says. It specializes in manufacturing pilings and rail and bridge components, and bought CXT primarily for its concrete railroad tie production capabilities.


But the precast building business has been a very pleasant surprise for them, Millard adds.