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CRRC gears up for global expansion

By ZHONG NAN | China Daily | Updated: 2020-05-29 09:39
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The booth of CRRC at 2019 World Intelligent Manufacturing Conference in Nanjing, Jiangsu province. [Photo/Sipa]

While many companies are seeking fresh ways to mitigate the economic impact caused by the COVID-19 outbreak across the globe, China Railway Rolling Stock Corp, the largest rolling stock manufacturer by production volume in the world, will further enrich its industrial chain to compete with its foreign rivals in global markets this year.

CRRC will expand its market presence in nine areas including wind power equipment, industrial robots and polymer composite materials to bolster its core competence in the global arena, said Liu Hualong, chairman of the centrally-administrated State-owned enterprise.

This would help minimize the economic impact caused by the epidemic in the world's market for industrial goods, he said while stressing the company will vigorously develop new growth points from urban infrastructure projects, strategic emerging industries and modern service businesses in 2020.

The firm will also continue making breakthroughs in developing the next generation trains.

The Beijing-based group will deploy more resources in other fields such as new energy automobiles, environmental protection, photovoltaic power generation and maritime engineering equipment, heavy construction and mining machinery. This will go along with information and software solutions to build itself into a giant conglomerate.

Liu reiterated these moves will help CRRC better confront challenges from its competitors in France, Germany and Japan.

A number of major merger and acquisition deals have occurred in the global rail transit equipment industry, and the market concentration rate has significantly risen since 2015.

After China's CSR Corp and CNR Corp merged and formed CRRC in 2015, French train maker Alstom SA acquired a train-signaling business from United States-based General Electric Co in the same year.

Japan's Hitachi Ltd bought Italian rail equipment maker AnsaldoBreda S.p.A and signal system provider Ansaldo STS S.p.A to seal more deals in developed markets.

Liu said it is normal for major players to conduct mergers and acquisitions in the market of rail transit equipment to enhance competitiveness.

According to Liu, the State-owned company will chart plans to introduce new strategic investors and digital technologies into its products, as well as compete with foreign competitors in the global market with advanced and durable products, especially in economies related to the Belt and Road Initiative.

CRRC signed a contract to provide 18 new light-rail trains and five years of maintenance services worth 49.6 million euros ($54.7 million) for Porto Metro in Portugal in late January. The firm beat out bids from Siemens Mobility and Skoda Transportation. This is the Chinese company's first deal to enter the urban rail transport market within the European Union.

The testing work is expected to start in Porto Metro's network in the second half of next year. The Chinese trains will be shipped to Portugal between 2021 and 2023.

Under the deal, the light-rail trains would have a capacity of 252 passengers of which 64 will be seated. The trains will have a maximum speed of 80 km/h. They will join the existing fleet of 30 Bombardier Tram-Train vehicles and 72 Bombardier Eurotram.

Zhou Lisha, a researcher at the research institute of the State-owned Assets Supervision and Administration Commission of the State Council, said strong financing and a flexible investment strategy will help the Chinese train maker stay ahead of its foreign rivals. High-speed train technology and a sophisticated global sales and management network will be key growth drivers.

CRRC currently has 78 subsidiaries and 17 research facilities throughout the world. Its products and services have entered 105 countries and regions. The group's sales revenue grew by 2.58 percent year-on-year to 19.87 billion yuan ($2.8 billion) in overseas markets, according to its latest annual fiscal report.

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