At a time when there is a huge oversupply of idled freight railcars and ocean ships, Canada’s Nova Scotia provincial government is drawing from those industries to aim at another that has growing demand -- wind towers.
The province has struck a deal with Daewoo Shipbuilding and Marine Engineering to take over a shuttered railcar factory at Trenton, which U.S. car builder Greenbrier closed in 2007.
The plan would bring in Daewoo to revive the plant for another type of steel product manufacturing. That would follow the lead of another large railcar firm, Trinity Industries, which has diversified into wind towers over the past decade as its rail freight market has withered.
The $88 million plan will reportedly have Nova Scotia underwriting two-thirds of the costs to get TrentonWorks back on its feet, to help generate up to 500 jobs in the next three years, with other contributions from Daewoo and the Atlantic Canada Opportunities Agency.
The agreement gives Daewoo a 51 percent equity stake while the province will hold a 49 percent share, based on their direct cash investments. The regional government is lending about $39 million for equipment, site acquisition financing and working capital, and putting up about $19 million in cash.
The regional government’s support is nothing new, as it had joined with Canada’s national government and union workers to offer incentives when trying to keep Greenbrier at Trenton.
This deal, though, takes advantage of a growing market for wind energy components, especially in the United States as electricity suppliers try to shift more of their production to non-carbon sources. Right now, a lot of wind turbines, towers and blades are built in the United States or overseas, so promoters hope that refitting TrentonWorks’ steel-forming operations for the wind business offer a chance to tap into what should be a long-lasting clean power market.
Contact John D. Boyd at email@example.com.