CSR's overseas orders 'to rise 50%'
BY 2012-04-17 19:31:21
Wenzhou train crash having little effect on company's business
China South Locomotive and Rolling Stock Corp Ltd, one of the two largest high-speed train producers in China, said its overseas orders will increase substantially this year as overseas demand for its products outstrips domestic demand.
The company, also known as CSR, said its overseas orders have not been affected by the high-speed train crash that occurred near Wenzhou, Zhejiang province, last year. It expects to see its orders increase by at least 50 percent in 2012, said a senior CSR official, who declined to identify himself.
The company predicted that 20 percent of its revenue will come from overseas by 2015, up from 8 percent in 2011.
CSR Zhuzhou Electric Locomotive Co Ltd, a CSR subsidiary, recently won a bid to supply 20 sets of light rail vehicles to Malaysia's AMPANG (AMG) Line Extension Project, which will extend one of the two lines in the Kuala Lumpur Rail Transit System network.
China will see several countries, including the US, Russia and India, outpace it this year in railway expansion. As a result, CSR is trying to move faster into the overseas market.
It is now talking with its partners in Europe, North America and Australia about the possibility of acquiring new technology and reducing its dependence on the domestic market.
"We are looking for companies that will strengthen our technology," Bloomberg reported, quoting CSR Chairman Zhao Xiaogang.
"Companies in developed countries are experiencing some difficulties and are willing to sell their assets."
CSR's 2011 profits increased by 50 percent year-on-year to reach 5 billion yuan.
Meanwhile, its competitor, China Northern Locomotive and Rolling Stock Industry Corp, also reported a 50 percent year-on-year increase in profits in 2011, saying it had 3.2 billion yuan in profits that year. Its overseas revenue increased by 40 percent that year, even though it gets only 10 percent of its total revenue from that source.
China Northern Locomotive has supplied freight trains to Australia, New Zealand, France, as well as to countries in Central Asia and South America. Apart from trains, the company recently exported control system technology to Bangladesh.
On July 23 last year, two high-speed trains crashed on a line near Wenzhou, killing 39 people. The accident was caused by serious signal malfunctions, and CSR has denied that its trains were to blame.
China plans to spend 400 billion yuan ($63.4 billion) this year on railway projects. That was down from 469 billion yuan in 2011 and from more than 700 billion yuan in 2010, a sign that the country is fine-tuning its railway industry.
Plans now call for the country to have 120,000 kilometers of railway tracks by 2020, up from 91,000 kilometers in 2011. According to CSR's estimate, China will have 100,000 kilometers of railway tracks by the end of 2012.