Koppers Amends Contract Terms with Class I Railroads

Written by Jennifer McLawhorn, Managing Editor
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PITTSBURGH, Pa. – Yesterday, Koppers announced that it has “agreed to an amendment of its contract with one of its Class I railroad customers.”

Yesterday, Koppers announced that it has “agreed to an amendment of its contract with one of its Class I railroad customers.” The change extends the current agreement term an additional four years to 2030, “with favorable pricing adjustments.” This is the fourth Class I with which Koppers has agreed on increased pricing. The move is part of ongoing attempts “to recoup higher input costs due to inflation.”

Both the Executive Vice President and COO James Sullivan and President and CEO Leroy Ball put out statements on this agreement with Sullivan commenting that “Significant unexpected inflation and supply chain shocks, exacerbated by the pandemic and the war in Ukraine, put our rail business in an untenable situation with long-term supply contracts in place that provided only partial relief. The latest amendment and extension is another important step toward returning to an acceptable level of profitability.”

Ball stated that Koppers is “proud” of the company’s long history and that it has “seen a significant erosion in the profitably of our treated wood products over the past five years, which has led to a questioning of our long-term future serving the rail portion of that market. Adjusting the pricing in our existing agreements is a shot in the arm for this piece of our business and a recognition of the need to have a healthy supplier base serving the industry. While I am pleased with this latest development, we still have more work to do to convince others of the need to pay fair value for crossties, consistent with current market conditions.”

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