A vertically integrated steel and railcar manufacturing campus — producing domestic EAF structural steel and FRA-certified freight cars from a single 271-acre site in South Texas.
Two 100-ton Electric Arc Furnaces transform locally sourced scrap steel into new domestic structural steel — eliminating Section 232 tariff exposure and supply chain dependency for South Texas manufacturers. Powered by Texas renewable energy, our EAF process produces steel with more than 75% lower lifecycle carbon than traditional blast furnace production.
A complete hot-rolling facility converts EAF billets into the full range of structural sections the South Texas market requires — wide-flange beams, structural bar, coil, plate, and specialty shapes. Products serve automotive manufacturers, Eagle Ford Shale operators, and the I-35 infrastructure corridor — with significantly shorter regional lead times versus three to six weeks from distant out-of-state mills.
A twin-line FRA-certified assembly hall producing four freight car types for the North American market: Open-Top Hoppers, 60-ft Boxcars, Centerbeam Flatcars, and General-Purpose Flatcars. Balou is the only dedicated railcar manufacturer in South Texas — and the first new-build facility to enter the market in over a decade — with car body steel transferred directly from our own rolling mill at significant cost advantage.
An in-house specialty component shop machines AAR-certified wheels and axles from Balou rolling mill bar stock — creating full supply chain independence for the railcar division and a secondary revenue stream selling certified components to external car builders. This capability eliminates the single largest external purchase risk in railcar production and is unique among South Texas manufacturers.
South Texas is a $10 billion-plus manufacturing cluster that imports every ton of structural steel it consumes from mills 800 to 1,200 miles away. No EAF mill in the region produces the full range of structural sections. No railcar manufacturer operates within 1,400 miles. Balou was designed to fill that specific gap, in that specific geography, at this specific moment.
The convergence of Section 232 tariff pressure, Toyota's $3.6 billion San Antonio expansion, International Motors' consolidation of US truck assembly to San Antonio, and the North American freight car replacement cycle — all arriving simultaneously — makes South Texas the highest-probability site for a vertically integrated steel and railcar campus in the United States today.
Balou Car and Foundry Company was founded under the umbrella of Texas Public Railroad Corporation. That background created a direct, firsthand understanding of the freight railcar supply chain's structural weaknesses: long lead times, distance from manufacturers, and dependence on a handful of concentrated producers operating near full capacity.
The insight driving Balou is straightforward. South Texas is the fastest-growing heavy industrial region in the United States. It has no domestic structural steel producer for the full range of sections it consumes. It has no railcar manufacturer within 1,400 miles. And it has a federally designated Opportunity Zone site with dual Class I rail access already in place. Balou is the response to those three facts arriving simultaneously.
A single-site, vertically integrated manufacturing campus on ±271 acres in the South Texas region — with final site selection currently underway. Phase 1 begins with one Electric Arc Furnace, one rolling mill line, and Railcar Assembly Line A. Phase 2 adds the second EAF and mill line, reaching 200,000 tons per year of steel capacity. Phase 3 adds the second assembly line, reaching 520 railcars per year — the design output state of the campus.
The vertical integration is the core competitive advantage. Balou steel feeds Balou cars at internal transfer price — roughly $460 per ton versus $880 to $985 per ton on the external market — producing a per-railcar cost advantage of $4,200 to $5,800 versus any non-integrated competitor. That advantage is structural and permanent, not cyclical.
Section 232 steel tariffs and reciprocal tariff actions have materially increased the cost of imported steel for every US manufacturer. Toyota Motor North America committed $10 billion in US manufacturing investment in direct response to tariff and supply chain pressure. The Bipartisan Infrastructure Law's $1.2 trillion in infrastructure spending drives structural steel demand for years ahead.
The North American freight railcar fleet numbers 1.7 million cars with an average age of 20.4 years and rising. Replacement demand runs 40,000 to 80,000 cars per year consistently. The five major producers — Trinity, Greenbrier, GATX/ARI, FreightCar America, and National Steel Car — are all operating near capacity. South Texas has no dedicated railcar manufacturer.
Toyota announced a $3.6 billion expansion of its San Antonio campus in July 2026, adding 2,000 jobs and growing to 6,100 employees. International Motors consolidated all US Class 6-8 truck assembly to San Antonio after selling its Springfield, Ohio plant. The Eagle Ford Shale, Port of Corpus Christi, and I-35 corridor represent $10 billion-plus in capital that imports all of its structural steel today.
A leading candidate site is a master-planned industrial park in the Wilson County, Texas area. No final site selection has been made. The proposed campus footprint is ±271 acres, with expansion capacity within the same site, encompassing scrap receiving, melt shop, rolling mill, and railcar assembly operations.
The park is simultaneously served by both Union Pacific and BNSF with full unit train capability for 130-plus cars, and on-site switching is provided by Gravity Rail. This dual Class I access is the single most important site requirement for an EAF-scale scrap steel operation — and it is exceedingly rare. No credible alternative site in the greater San Antonio region offers equivalent rail infrastructure.
Candidate sites in the South Texas region offer considerably faster TCEQ New Source Review permitting timelines for EAF facilities. Conversations with regional EDCs have begun, and a Chapter 312 property tax abatement framework was revised in January 2026. Candidate sites sit within federally designated Opportunity Zone census tracts — enabling qualified investors to defer and reduce capital gains taxes through a Qualified Opportunity Fund structure.
Lot 23 carries existing staging track infrastructure that eliminates a significant portion of early civil construction cost and accelerates the timeline to first scrap steel delivery — a material advantage in a project where the TCEQ permitting clock and equipment lead times are the binding constraints.
| Metric | Balou Car & Foundry | Next Nearest Competitor |
|---|---|---|
| Proximity to South Texas Manufacturers | South Texas location · Significant regional lead time advantage | 800–1,200 miles · 3–6 week lead time |
| Import Tariff Exposure | Zero — 100% domestic scrap-to-product | Section 232 exposed on all imported steel |
| Carbon Footprint | >75% lower lifecycle CO₂ vs. blast furnace | Blast furnace or unknown origin steel |
| Railcar Steel Cost | ~$460/ton (internal transfer) | $880–$985/ton market price |
| Per-Car Cost Advantage | $4,200–$5,800 per car vs. non-integrated | External market steel purchase required |
| Supply Chain Risk | Eliminated — single-site, vertically integrated | Multi-supplier, multi-modal, multi-state |
| Nearest Railcar Manufacturer | Only dedicated producer in South Texas | 1,400+ miles — Trinity in TX is nearest |
Phase 1 workforce metrics at full staffing — Year 5 of operations. All positions pay a minimum of $32.18/hour with no exceptions.
Phase 2 at design output (200,000 tons · 520 cars): 250–315 total positions, $20–28M annual payroll, and $50–84M per year in total economic impact in Wilson County and the greater San Antonio south side corridor. Conversations with regional community colleges for workforce pipeline development are underway.
Site selection in progress — South Texas region. TCEQ New Source Review permit preparation underway (12–24 month review timeline). ERCOT interconnection study initiated. Critical-path orders placed: EAF furnace transformers and furnaces (18–24 month lead), rolling mill, and caster equipment. Conversations with regional EDCs and investors underway. Capital committed: $40–88M.
Building construction begins on S-1 Melt Shop, S-2/S-3 Scrap, and R-1 Assembly Hall. Phase 1 equipment delivery: EAF #1, Caster #1, Rolling Mill Line 1. Site infrastructure: roads, rail spurs, ERCOT substation, water, and gas. Workforce recruitment begins through regional community college partners. Project finance closes — IRBs and equity committed. Cumulative capital: $288–584M.
EAF #1 commissioned: first heat of steel produced. Rolling Mill Line 1 commissioned: first bar and coil product. Railcar Assembly Line A commissioned: first car certified. Parent company initial fleet delivery begins. Phase 2 equipment orders placed. Production: 50,000 tons, 200 cars.
EAF #2 installed and commissioned — 100,000+ ton/year capacity. Rolling Mill Line 2 commissioned with full structural shapes capability. Railcar Assembly Line B tooled. External steel market fully established — Toyota, International Motors, and Eagle Ford served. Workforce scales to 200+ positions. Production: 125,000 tons, 350 cars.
200,000 tons/year steel at full two-furnace operation. 520 railcars/year — both assembly lines fully operational. EBITDA: $34.7M steel division contribution. Specialty bar market established ($1,150/ton premium products). Phase 3 expansion planning: additional tons, additional car types. Total capital: $518M–$1.04B.
Balou Car and Foundry is in the pre-seed stage of formation. Conversations have begun with project finance lenders, institutional equity partners, strategic corporate investors, economic development organizations, and state and federal government contacts.