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Train companies' exports gain steam
By BAO CHANG ( China Daily )
2012-12-25

Chinese train manufacturers are seeing their exports increase quickly this year as the reputation of domestic innovations becomes stronger around the world.

China South Locomotive and Rolling Stock Co Ltd, one of the country's two leading train manufacturers, announced earlier this month it had signed an agreement with Pakistan's Ministry of Railways to sell 640 million yuan ($102.7 million) worth of locomotives to the country.

That came a week after the State-owned enterprise won a bid to provide $400 million worth of electric locomotives to South African Transnet SOC Ltd, a large rail, port and pipeline company in that country.

That deal marked the first time Chinese electric trains have been introduced into the African market, and was the biggest order for equipment of this sort that a Chinese train maker has ever received from overseas.

"Considering this new opportunity in the African market, CSR will push forward its rail transportation equipment business and broaden its cooperation with local companies in Africa," said Xu Zongxiang, general manager at CSR Zhuzhou Electric Locomotive Co Ltd.

CSR said that apart from product exports, the first batch of which will be delivered by the end of 2013, it will also provide technology used in the manufacture of electric locomotives to South Africa.

The promotion of technology in China's train-manufacturing industry has received a large amount of recognition in the international market.

China North Locomotive and Rolling Stock Corp, the country's second-largest train maker, received four patents from the United States Patent and Trademark Office earlier this month.

"This breakthrough patent grant in the US shows that CNR's technological innovation has reached a new high," said Xie Buming, general manager at CNR Institute.

"Technological innovation is the main way for the advanced Chinese rail transportation equipment industry to become more internationalized," Xie said.

By the end of November, CNR had applied for 90 patents abroad, the most among Chinese suppliers of rail equipment.

In November, CNR's Dalian Locomotive and Rolling Stock Co Ltd signed an agreement with Hong Kong Mass Transit Railway Corp to sell it 23 diesel locomotives.

CNR said its entry into the Hong Kong market will help it move further into the international premium market and gain recognition from customers around the world.

CNR and CSR have been exploring overseas markets at a fast pace in recent years.

In the first half of the year, CNR's revenues surged by 108 percent from a year earlier to 4.48 billion yuan in the international market, an amount that made up 10 percent of the enterprise's total income, according to a CNR financial statement.

In the first six months of 2012, CSR's overseas business revenues increased by 95 percent year-on-year to 4.8 billion yuan. Foreign business is the source of about 11 percent of the company's total business, data from the company show.

From the start of the year to December, the value of CSR's overseas orders had reached nearly $1.7 billion. CSR has also won bids to undertake railway projects in Malaysia, Turkey and Singapore in the first half of the year.

Domestic market

Industry insiders say both of the train makers are likely to increase their production capacity in the coming years, not only to meet demand from foreign countries but also from the domestic market.

CNR recently announced it had entered into five contracts in the Chinese market that have a total value of 6.8 billion yuan.

As for CSR, five of the six new orders it recently signed came from domestic customers. Those have a value of 4.39 billion yuan.

Attempting to meet its annual investment goals, the Ministry of Railways has been putting more money into fixed railway assets in the past two months.

China's investments in fixed railway assets have included the purchase of transportation equipment. No more than 700 billion yuan will go into railway construction in 2013, slightly more than was used for that purpose this year, Chinese media have reported.

According to the Ministry of Railways, the value of investments into fixed railway assets this year is 630 billion yuan, of which about 516 billion yuan went to the construction of railway infrastructure.

Contact the writer at baochang@chinadaily.com.cn