Strategic Investment in Evertrak, a North American Composite Railroad Tie Manufacturer

Rhea-AI Summary

Sumitomo has announced a strategic investment in Evertrak, a U.S.-based manufacturer of composite railroad ties for the North American railroad industry. The partnership aims to build sustainable railroad infrastructure using ties made from recycled plastics.

Evertrak's flagship product, the Evertrak 7000, offers a lifespan exceeding 50 years in High Decay Zones, compared to 8-12 years for traditional wood ties. The North American market presents significant opportunities, with an annual replacement demand of approximately 20 million ties, including 6 million in High Decay Zones.

Founded in 2017 and based in St. Louis, Missouri, Evertrak has successfully developed cost-competitive composite ties that are being adopted by Class 1 railroads. The ties are 100% recyclable and offer superior environmental performance and long-term cost savings.

Positive

• Evertrak 7000 offers 4-6x longer lifespan (50+ years vs 8-12 years) compared to wood ties
• Large market opportunity with 20 million annual tie replacement demand
• Product already adopted by major Class 1 railroads
• 100% recyclable product aligning with environmental sustainability trends

Negative

• None.

News Market Reaction

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+1.22% News Effect

On the day this news was published, SSUMY gained 1.22%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Partnership to Support Building a Sustainable Railroad Infrastructure with 
Composite Railroad Ties Made from Recycled Plastics

NEW YORK, Jan. 21, 2025 /PRNewswire/ -- Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Shingo Ueno), through its subsidiary Sumitomo Corporation of Americas (collectively referred to as the "Sumitomo Corporation Group"), has announced a strategic investment in Evertrak, a U.S.-based manufacturer of composite railroad ties (*1) for the North American railroad industry. This partnership aims to reduce environmental impacts and build a more sustainable railroad infrastructure in North America.

Sustainable Solution Initiatives in the North American Railroad Industry
In High Decay Zones, primarily located in the southeastern United States, heat and high humidity accelerate the early decay of wood railroad ties, posing challenges from both cost and environmental perspectives. To address these issues, the North American railroad industry is increasingly adopting composite railroad ties as a sustainable alternative. Made from recycled plastics and fiberglass, composite ties offer numerous advantages, including superior environmental performance, extended durability, and long-term cost savings. In addition, composite ties are 100% recyclable after use.

Market Overview: North American Railroad and Composite Ties

• Railroad ties replacement demand: ~20 million ties annually
• Composite tie opportunity: ~6 million ties annually (High Decay Zone)

Evertrak: Pioneering Durable and Sustainable Composite Tie Solutions
Founded in 2017 and headquartered in St. Louis, Missouri, Evertrak is a leading manufacturer of composite railroad ties. The company's flagship product, the "Evertrak 7000," offers an unparalleled lifespan of over 50 years in High Decay Zones, compared to the average 8-12 years of wood railroad ties. The North American railroad industry has been considering the adoption of composite railroad ties since the early 2000s, but achieving the required cost competitiveness and quality for mass production has been a significant challenge. Evertrak overcame these barriers with the Evertrak 7000, which is now being adopted by Class 1 railroads (*2), offering significant long-term cost and environmental advantages.

Established Initiatives in the North American Railroad Industry and the Background of the Investment
Sumitomo Corporation Group, primarily through its Steel Group, has been instrumental in supporting North American freight railroad infrastructure by exporting rails from Japan and manufacturing and selling tie plates, wheels, and axles in North America. The decision to invest in Evertrak stems from a shared vision to build sustainable railroad infrastructure and the opportunity to create synergies with Sumitomo Corporation Group's existing businesses. This strategic partnership will enhance Evertrak's production capacity and accelerate the development of competitive and sustainable product solutions.

Future developments
North American freight railroad is one of the environmentally friendly transportation modes, with low CO2 emissions and the ability to handle long-distance, large-scale transport. Sumitomo Corporation Group is committed to contributing to the development of sustainable railroad infrastructure in the North American railroad industry, the world's largest railroad freight market, through the provision of railroad products and other solutions.

＜Reference Information＞

Overview of Evertrak
Company Name	Evertrak
Established	:017
CEO / Founder	Tim Noonan
Headquarters	St. Louis, Missouri, U.S.A.
Manufacturing Facilities	1 (St. Louis)
Business	Manufacture and sale of composite railroad ties
Website	https://evertrak.com/

 (*1) Primarily manufactured from recycled plastics and fiberglass, these ties are recyclable at the end of their lifecycle, providing a sustainable alternative to wood railroad ties.

(*2) In the North American railroad industry, Class 1 refers to the seven major freight railroad companies operating in the United States, Canada, and Mexico. This classification is established by the U.S. Bureau of Transportation Statistics (STB) based on the annual revenue of railroad companies.

About Sumitomo Corporation
Sumitomo Corporation (TYO: 8053) is an integrated trading company with a strong global network comprising 128 offices in 66 countries and regions. The Sumitomo Corporation Group consists of approximately 900 companies and 80,000 employees on a consolidated basis. The Group's business activities are spread across the following nine groups: Steel, Automotive, Transportation & Construction Systems, Diverse Urban Development, Media & Digital, Lifestyle Business, Mineral Resources, Chemicals Solutions and Energy Transformation Business. Sumitomo Corporation is committed to creating greater value for society under the corporate message of "Enriching lives and the world," based on Sumitomo's business philosophy passed down for over 400 years.

About Sumitomo Corporation of Americas

Sumitomo Corporation of Americas is the largest subsidiary of Sumitomo Corporation, an integrated trading company with a strong global network comprising 128 offices in 66 countries and regions. The Sumitomo Corporation Group consists of approximately 900 companies and nearly 80,000 employees on a consolidated basis. The Group's business activities are spread across the following nine groups: Steel, Automotive, Transportation & Construction Systems, Diverse Urban Development, Media & Digital, Lifestyle Business, Mineral Resources, Chemicals Solutions and Energy Transformation Business. Sumitomo Corporation is committed to creating greater value for society under the corporate message of "Enriching lives and the world," based on Sumitomo's business philosophy passed down for over 400 years. For more information, please refer to our website at www.sumitomocorp.com.

FAQ

What is the market size for railroad tie replacement in North America that SSUMY is targeting?

The total North American railroad tie replacement demand is approximately 20 million ties annually, with 6 million ties specifically in High Decay Zones.

How much longer do Evertrak's composite ties last compared to traditional wood ties?

Evertrak 7000 composite ties last over 50 years in High Decay Zones, compared to 8-12 years for traditional wood railroad ties.

What are the environmental benefits of SSUMY's investment in Evertrak's composite ties?

The composite ties are made from recycled plastics and fiberglass, are 100% recyclable after use, and help reduce environmental impact through extended durability.

Which major customers are already using Evertrak's composite railroad ties?

Evertrak's composite ties are being adopted by Class 1 railroads, which represent the seven major freight railroad companies operating in the United States, Canada, and Mexico.