From the Wall Street Journal via MSN, November 9:
Electric cars. The solar build-out. Washington’s rural-broadband initiative. Utilities bracing the grid for stronger storms. They all depend on the same thing: big trees.
The utility-pole business is booming, thanks to a flood of public and private infrastructure spending. So the hunt is on for the tallest, straightest, knot-free conifers, which are peeled, dried and pressure-treated at facilities such as Koppers Holdings’ pole plant in southeastern Georgia’s pinelands.
Employees cruise surrounding pine plantations, marking pole-worthy loblolly and longleaf and making offers. The bigger, the better these days, given how much more equipment and cable poles must hold in the era of fiber optics and electric cars, said Jim Healey, Koppers’ vice president of utility and industrial products.
For landowners, especially the families and individuals who grow much of the South’s pine, the pole boom means higher prices for standout trees than what sawmills pay.
Shareholders of the two firms that dominate the American pole business—as well as railroad ties—have also been winners. Over the past year, Pittsburgh’s Koppers and Montreal’s Stella-Jones are up 49% and 87%, respectively, compared with a 16% rise in the S&P 500 stock index.
“Demand right now in North America for utility poles is outpacing capacity,” said Stella-Jones Chief Executive Éric Vachon.
This summer Stella bought pole facilities in Alabama, Georgia and Mississippi, where it also opened a new peeling plant. Additional plants are planned for next year in British Columbia and North Carolina. Stella also installed automated drilling equipment at its Eugene, Ore., facility and is looking for other places robots can speed output.
Koppers, which notched record domestic pole sales and profit during the summer quarter, is adding drying capacity to plants in Alabama, North Carolina and Virginia. A new one is under construction in Louisiana’s western woodlands to feed peeled poles to a rail-tie treating facility in a part of Texas without many pine trees.
“We see a very good peak market for the next three to five years,” Healey said.
Makers of concrete, steel and composite poles are also ramping up. Steel-pole supplier Arcosa has a concrete-pole plant under way in Florida. RS Technologies raised about $270 million in debt and equity to expand factories in Utah and Ontario where it forms poles from polyurethane resin, and to build another in Houston. “It is an absolute infrastructure boom going on right now,” said RS CEO George Kirby....
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