CRRC on track to take over Czech firm

Group shifts fo­cus to over­seas mar­kets

China Daily (USA) - - BUSINESS - By JING SHUIYU andZHONGNAN Con­tact the writ­ers at jing­shuiyu@chi­nadaily. and zhong­nan@chi­nadaily.com.cn

China Rail­way Rolling Stock Corp, the coun­try’s largest rail­way ve­hi­cle and equip­ment man­u­fac­turer, is in takeover talks with Czech Re­pub­lic’s Skoda Trans­porta­tion AS, a move to fur­ther in­crease its mar­ket share in Europe’s rail­way mar­kets.

CRRC Zhuzhou Elec­tric Lo­co­mo­tive Co, one ofCRRC’s man­u­fac­tur­ers mainly pro­duc­ing elec­tric lo­co­mo­tives, is in charge of the talks to buy a 100 per­cent stake in Skoda Trans­porta­tion, the Hu­nan­based com­pany said on Sun­day.

The Czech com­pany mainly pro­duces trams, elec­tric lo­co­mo­tives, car­riages and elec­tric buses, as well as trac­tion mo­tors or com­plete drives for traf­fic sys­tems. If the deal is sealed, this will be the first time the Chi­nese group has taken over a full-set rail tran­sit equip­ment man­u­fac­turer.

The fil­ing did not dis­close the takeover price. The two par­ties have yet to sign any legally bind­ing trans­ac­tion doc­u­ment.

This move will fur­ther ex­tend CRRC’s pres­ence in Euro­pean mar­kets.

“CRRC is shift­ing its fo­cus to over­seas ex­pan­sion. Ac­quir­ing lo­cal com­pa­nies is a more con­ve­nient method for CRRC to gain more ac­cess to Europe, com­pared with build­ing the mar­ket by it­self,”

A Chi­nese visi­tor

A qual­ity con­troller said Cheng Hui, a re­searcher at the In­sti­tute of Trans­porta­tion Re­search at the Na­tional De­vel­op­ment and Re­form Com­mis­sion.

The sales rev­enue of Skoda Trans­porta­tion reached 677 mil­lion eu­ros ($721.3 mil­lion) in 2015, while its net in­come amounted to 22 mil­lion eu­ros. The com­pany has more than 5,000 em­ploy­ees.

In­dus­try data show there is huge po­ten­tial for the global rail trans­porta­tion in­dus­try from a long-term per­spec­tive.

The global rail­way mar­ket is now val­ued at 162 bil­lion eu­ros, of which CRRC ac­counts for 15 per­cent, ac­cord­ing to data from SCI Verkehr, an in­de­pen­dent con­sul­tancy com­pany for the trans­porta­tion sec­tor. The ca­pac­ity is pro­jected to ex­ceed 190 bil­lion eu­ros in 2018, with an an­nual growth rate of 3.4 per­cent.

The deal is seen as CRRC’s lat­est ef­fort to ex­pand over­seas. Prior to that, CRRC’s sub­sidiaries in­clud­ing CRRC Zhuzhou Elec­tric Lo­co­mo­tive, Zhuzhou CRRC Times Elec­tric Co and CRRC Si­fang Co in­vested 3 bil­lion yuan ($434.4 mil­lion) to ac­quire Euro­pean tech­nolo­gies and man­u­fac­tur­ing parts sup­pli­ers in­clud­ing the United King­dom-based Dynex and Ger­many’s GmbH.

Zhao Mingde, di­rec­tor of CRRC’s strat­egy and plan­ning depart­ment, said CRRC will turn into a multi­na­tional com­pany. As it ex­pands abroad, the com­pany aims to man­u­fac­ture in key mar­kets, pur­chase lo­cal ma­te­ri­als and uti­lize lo­cal man­power. Boge Elast­met­all

trav­el­ers. buys Santa Claus gifts in Ro­vaniemi, Fin­land. Baidu Map is ex­pand­ing into Nordic coun­tries to help Chi­nese makes an in­spec­tion at an assem­bly line at New H3C Group in Hangzhou, Zhe­jiang prov­ince.

LI BO / XIN­HUA

Work­ers check a bul­let train lo­co­mo­tive man­u­fac­tured by China Rail­way Rolling Stock Corp in Zhengzhou, He­nan prov­ince. A CRRC sub­sidiary is con­sid­er­ing a takeover of a Czech com­pany to ex­pand its mar­ket share in Europe.

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