Wind Energy

Great Bend sits in a key geographic area near the center of the state. This geography makes it a logical staging area for wind components as it is in close proximity to several developmental sites for future projects. Additionally, Watco has developed relationships within this industry and currently serves it in multiple facets, including transportation provider as well as mechanical inspections and repair work on railcar fleets. Growth within this industry requires understanding needs and where project destinations can be most efficiently served by rail. In having a centralized facility in Great Bend, combined with an available concrete laydown area immediately west of the transload site, the Great Bend facility lends itself as a site that is immediately ready to receive wind components for surrounding projects. The ability to be ready now is one of the most vital components in successfully attracting projects.

Cement

Much of the cement in this area has been utilized for pads used in the oil drilling process. While demand for cement has declined in this area recently due to lower energy prices, we believe this trend will adjust itself in the near future and that this commodity will have the ability to be one of the fastest growing. Having a facility such as Great Bend will expedite this adjustment through availability and increase in potential project viability based on location and pricing efficiencies.

We also believe there will be additional opportunities to increase cement usage in this area outside of the oil industry. Some of the industries that will drive future cement and concrete demand will be:

• KDOT highway projects

• Wind Energy projects

• County and local highway project

• Local and regional construction projects

Pipe

Great Bend sits in a key geographic area between oil and gas rich areas in North Dakota and Montana, and the major storage hubs of Conway KS (natural gas), and Cushing OK (oil). Watco has handled multiple pipe projects in KS and OK in the past 5 years and has developed exceptional relationships not only with the pipe companies themselves, but with the logistics companies that determine the location of offload sites for projects. Through these relationships, Watco has handled approximately 5000 carloads of pipe across the Midwest in the last few years. The Watco rail network across the Midwest is strategically located for many pipeline projects that will be required in the future and Great Bend provides additional access and capabilities to support those future needs..

Miscellaneous

While planning for current markets and opportunities provide the ability to start a facility such as Great Bend, the long term viability exists with both the known and unknown. Sherwood and Watco have started multiple transload facilities from the ground up, and have seen the primary markets and commodities supported within a facility change multiple times over. It is both this flexibility to adjust as well as preparation for commodities not yet seen, that allow a facility to be successful. We believe that with warehousing, a hard surface laydown area combined with access to multiple Class I Railroads, that commodity mix at this location will be significant. Through the access to multiple methods of storage along with a centralized location within the United States, Great Bend lends itself to almost any commodity utilized within the region and in some cases, outside the region. Warehousing allows for distribution services throughout a significant geographic area. With that being said, additional opportunities include:

• Lumber and related construction materials

• Grain and grain products

• Chemicals

• Canned goods

• Dimensional loads 

• Oil field related products