KCS, Bulkmatic Announce Mexico Refined Energy Products Terminal to Facilitate Increased U.S. Export of Liquid Fuels

Kansas City Southern (KCS) (NYSE: KSU) and Bulkmatic Transport Company (Bulkmatic) today announced a memorandum of understanding to form a 50/50 joint venture investment which will facilitate and expand the exportation of liquid fuels from the United States to Mexico. The project will include the construction of a unit train liquid fuels terminal located in Salinas Victoria near Monterrey, Nuevo Leon. The facility will be served by Kansas City Southern de Mexico, S.A. de C.V. (KCSM).

The joint venture comes as a direct result of energy reform legislation passed in Mexico in 2013. Recognizing that it lacked the refinery infrastructure necessary to meet its growing demand for refined energy products, Mexico developed legislation which put into motion a process which will culminate by 2018 in the country’s energy markets being fully open to foreign investment and the importation of refined energy products, including gasoline and diesel.

“We are pleased to pursue this joint venture to expand the export of U.S. petroleum products into Mexico,” said KCS president and chief executive officer Patrick J. Ottensmeyer. “The terminal will provide vitally needed refined energy products and boost job creation in the U.S. and Mexico. The project neatly aligns Mexican energy reform goals with U.S. refining companies’ desire to expand their operations into new markets.”

“We are excited to partner with KCS to create a cost-efficient linkage between Mexican consumers and U.S. producers of refined products. This project will benefit economies on both sides of the border by providing consumers in Mexico access to more suppliers, and refineries in the U.S. access to important new markets,” said Bulkmatic chief executive officer Alfie Bingham.

The joint venture partners will invest approximately U.S. $50 million over the next few years to develop the terminal, which will begin limited operations in third quarter and have storage facilities in mid-2018 that will provide retail fuels for the population of the Monterrey metropolitan area.

About KCS

Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include KCSM, serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a railway network linking the commercial and industrial centers of the U.S., Mexico and Canada.

About Bulkmatic

Bulkmatic, headquartered in Griffith, Ind., has been a leader in dry and liquid bulk materials handling, transportation, and logistics in the U.S. for nearly 50 years. Bulkmatic de Mexico, a subsidiary of Bulkmatic, operates a network of rail-served bulk materials transload and storage terminals throughout Mexico. Products handled include plastic resins, LPG, petrochemicals, chemicals, lube oils, asphalt and various food commodities. Bulkmatic de Mexico has been in operation for over 20 years and is the largest bulk commodity rail-to-truck transloader in Mexico.