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Economy

Rail manufacturer set to upgrade Malaysian facilities(2)

1
2017-04-14 09:25China Daily Editor: Feng Shuang ECNS App Download

"Benefiting from the location, CRRC Zhuzhou can provide timely maintenance services for the new railroad and reach more countries in Southeast Asia," said Zhou, who has worked in the export business for more than two decades.

Maintaining rail equipment can be a lucrative business in itself, according to Liao Hongtao, deputy general manager of the company. "Even though a lot of money can be made from selling trains, providing maintenance services can also be profitable," he said, adding that many core parts need to undergo extensive maintenance after a year of use.

At present, the maintenance subsidiary's main business involves servicing the 38 sets of six-car electric multiple units and 50 sets of light rail vehicles on Malaysia's Ampang Line. More than 90 percent of its revenue comes from the local market.

Global network

In the ASEAN region, CRRC Zhuzhou's main markets are Singapore, Indonesia, Thailand and Malaysia, where there is rising demand for electric locomotives and mass-transit trains for city and suburban lines.

CRRC Zhuzhou has six subsidiaries covering more than 10 countries and regions across Asia, Europe and Africa. Last year, the company established a European subbranch in Austria, opening itself to the continent's high-end market through international acquisitions and collaborations. The global rail and transit industry will be worth $240 billion this year, with maintenance services accounting for half that figure, according to a study by the Paris-based International Union of Railways in July.

However, CRRC Zhuzhou faces fierce competition from foreign rivals such as Siemens of Germany and Bombardier of Canada, who have their own global service networks to boost revenues in major markets such as Asia, the Middle East and Europe.

CRRC Zhuzhou understands the importance of building a complete network as part of its global expansion, according to Liao, its deputy general manager. "The tactic of establishing an ASEAN rail center in Malaysia is based on our market share in the country and its geographic location," he said.

Wang Zhipeng, a professor of rail transportation at Beijing Jiaotong University, said: "In the long term, China and the ASEAN economies will count on enhanced regional cooperation, especially in rail transportation, to stimulate trade and attract investment while improving regional economic integration."

Zhou of CRRC Zhuzhou said: "Singapore, Thailand, Indonesia and Malaysia's ongoing plans to build a high-speed rail link will further fuel the hope that Southeast Asia could one day have a system similar to the one in Europe."

With his eyes firmly fixed on future orders, Zhou predicted that ASEAN members will need 1,100 new carriages, and refurbishment for another 700, within the next five years.

  

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