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Train maker expects more export orders

By Hu Haiyan ( China Daily ) Updated: 2011-10-29 08:04:44

Train maker expects more export orders

Workers assemble trains at China South Locomotive & Rolling Stock Corp Ltd's factory in Tianjin. Jacky Cheng / for China Daily

BEIJING - China South Locomotive & Rolling Stock Co Ltd (CSR), the country's largest maker of trains, expects to gain more overseas sales in the next five years, despite the adverse effects of a fatal crash in East China on July 23, the company said on Friday.

"Our overseas revenue is expected to enjoy year-on-year growth of 30 to 40 percent in the next five years," said Zhao Xiaogang, chairman of CSR, at the Fortune CEO Summit in Beijing.

"And our exports are estimated to increase by 50 percent this year compared with 2010."

He admitted that the high-speed collision, which killed 40 people in Wenzhou, Zhejiang province, has had some adverse effects on the development of China's high-speed rail industry.

All of the companies related to the industry, ranging from suppliers of signaling equipment and electronics to manufacturers of bullet trains, have been under great pressure, Zhao said.

CSR made the two bullet trains involving in the Wenzhou accident, but Zhao said the company's core business hasn't been affected by the accident.

"CSR's order to provide bullet-train locomotives worth 50 billion yuan ($7.86 billion) hasn't been affected by the accident and will be fully accomplished within the next year," he said.

Zhao also is positive about the prospects for the development of China's railway industry.

"The railway industry in China may slow in the short term due to safety concerns after the crash, but in the long run, the industry will develop rapidly because there is still great domestic demand and the railway system is also essential to China's long-term infrastructure development," Zhao said.

China has been working for years to develop a high-speed rail network to rival Japan's and investment in the sector last year hit a record high of 749.5 billion yuan.

In line with the high-speed railway construction goal set in the country's 12th Five-Year Plan (2011-2015), China plans to build a high-speed system totaling 16,000 kilometers by the end of 2015.

"The high-speed rail industry will still enjoy momentum in the future," said Zhao.

Recently, the Ministry of Railways issued short-term financing bonds (366 days) worth 20 billion yuan and Premier Wen Jiabao has also said that the central government will provide funding for some huge infrastructure construction projects.

"All of these will be very beneficial to the railway industry's development," Zhao said.

CSR also has plans to begin manufacturing signaling equipment in the near future.

"We have won a bid to provide some signaling equipment in China, which underlines our ambition to enter this market," said Zhao, who declined to reveal more details.

CSR posted a net profit of 2.04 billion yuan in the first half of the year, a rise of 85 percent year-on-year, on strong demand for high-speed rail equipment. Revenue surged 42 percent to 40.12 billion yuan during the same period.

China Daily

(China Daily 10/29/2011 page9)

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