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Hillwood, BNSF partnering on plastic packaging facility for Alliance

🕐 5 min read

Resin manufacturing and shale

Between 2014 and 2030, net plastic resin exports are expected to more than triple, rising nearly $15 billion from $6.5 billion to $21.5 billion, according to a 2015 report by the American Chemistry Council. The report said that the gain in exports was expected to be driven largely by polyethylene and polyvinyl chloride (PVC), two resins derived from ethylene, primarily from shale gas.

www.americanchemistry.com

BNSF Railway Co., real estate developer Hillwood and resin packaging firm Packwell Inc. have agreed on a framework for building a new plastics export packaging facility at the AllianceTexas development in North Fort Worth.

The facility will be built in the rail-connected Alliance Westport industrial sector located at the 180,000-acre mixed-use development, according to a news release issued by Hillwood.

“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,” said Hillwood President Mike Berry.

Though officials had no information on the size of the facility or potential job numbers, the collaboration between Hillwood, BNSF and Packwell is expected to greatly benefit producers of plastic resins by creating a more cost-effective and efficient supply chain for producers who require high volumes of exports to multiple global destinations.

The Alliance Global Logistics Hub infrastructure will support the project as well.

The facility will be part of a new route that will enable Packwell to ship containerized plastic resins to end-users using an array of ocean steamship lines that are affiliated partners with BNSF. The steamship lines operate between the BNSF Alliance Intermodal terminal and Asia via West Coast ports in Los Angeles, Long Beach and Oakland, California.

The Alliance facility will be ready in about a year, Hillwood officials said. The plastics resins will come by train from Houston to the Packwell facility, where they will be packaged for shipping. They will then go back to BNSF for shipment.

Plastic resins are used to make a wide variety of plastic products around the world, but primarily in Asia. The growth of the plastic resin market is related to the growth in the amount of natural gas available in Texas and the Unites States, primarily resulting from shale exploration.

A 2015 report from the American Chemistry Council says that shale gas production has “reversed the fortunes of the plastics industry, shifting the competitive advantage to the United States, where producers mostly use raw materials derived from natural gas,” while other regions are using oil-based feedstock.

“A decade ago, the United States was among the highest-cost plastics producers,” said Steve Russell, ACC’s vice president of plastics, in a news release. “Today, America is one of the most attractive places in the world to invest in plastics manufacturing. Even after recent declines in oil prices, our nation has a decisive edge.”

Hillwood began looking at the issue two years ago, said Steve Boecking, vice president at the real estate firm.

“We recognized this phenomenon, a big blip in the industry, with resin producers almost doubling new resin plants on the Gulf coast,” he said. There are at least 27 expansions being built on the Gulf coast, all primarily designed for export. Much of that will go through the Port of Houston, but because many of the shipments are headed to Asia, it made sense to look at going through Alliance, Boecking said.

“BNSF’s extensive rail network will give shippers the flexibility to reach multiple international markets faster with the option to move the commodity to the east by interchanging in Chicago, to the west via several West Coast seaports or to the north into Canada from AllianceTexas,” said Richard Miller, BNSF assistant vice president for industrial products sales.

The project also benefits from the availability of empty shipping containers in the Dallas-Fort Worth area because of the large volume of imports that arrive at the AllianceTexas Global Logistics Hub.

“We’re primarily an import hub here, so those containers can be shipped out empty, but why do that when you can fill them with product,” said Hillwood’s Boecking.

BNSF trains will deliver bulk covered hopper cars from new and expanded Gulf Coast plastics production facilities to Packwell’s new facility at AllianceTexas. Packwell will package the resin and load the containers before delivering to the BNSF ramp. The loaded containers will be delivered using a new heavy-load corridor that will be built to allow the legal over-the-road delivery of the resin from Packwell’s packaging facility to BNSF’s Alliance Intermodal Terminal less than a mile away.

That’s key too, said Boecking. These resins could be shipped from the coast via trucks, but because of load limits on highways the truck containers would not be full. Shipping via rail will be more cost- and energy-efficient because the containers can be shipped full on a rail car, he said.

“TxDOT [Texas Department of Transportation] is real excited about this because it eliminates the need for wear and tear on highways and it eliminates the need for all those trucks on the road,” said Boecking. “Less than a mile of this involves trucks.”

According to Packwell officials, the vision for this new facility is based on having access to all the key parts of the supply chain.

“We understand the complexities of this new supply chain model and expect to expand our business model by leveraging the natural advantages of this relationship with Hillwood and BNSF,” said Packwell President Al Duran. “The AllianceTexas facility is ideally located to ensure the abundance of empty containers and also the ability to ‘heavy’ load export containers. The Fort Worth packaging location will facilitate a quick turnaround of railcars back to the plastics producers.”

Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

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