South Africa is next stop for train builder

By Xing Zhigang and Li Jiabao (China Daily) Updated: 2014-07-01 07:38

"We have kept improving and re-innovating our operations, and we developed all the core parts of those 359 locomotives ourselves. China's electric locomotive industry is cutting-edge."

South Africa's railway gauge is narrower, at 1,067 mm, than China's standard gauge of 1,435 mm.

"It was the first time that we produced electric locomotives for such a narrow line," She said.

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The order was mainly for cars used to transport coal and ore.

"While we appreciate that these large-scale deals may become less frequent in South Africa, we still believe the market remains a strong prospect for us and that further locomotive orders will be offered."

Orders are expected for parts and other railway products, too.

In addition to the South African contracts, the Johannesburg-based company has landed deals in Ethiopia, which also helped it contribute to the parent company's total revenues of 15.1 billion yuan ($2.42 billion) in 2012, and 20 billion yuan last year.

However, She said that further government financial support will be needed if the company hopes to remain competitive.

A shortage of working capital had hindered its bidding in 2012 to supply passenger trains there, he said, calling for tax breaks to be introduced for equipment exports "as European and American rivals continue to lower their prices".

"Continued communication between the governments is vital to help us source local components and reliable local partners."

The company's operations have also been affected by currency fluctuations, frequent strikes and rising labor costs, and those could still dent its factory plans in South Africa, he said.

"But we will set up a plant here to produce key components, as the local government has raised its requirements for local parts on some products," She said.

The company is also committed to corporate social responsibility in the local market, including worker training and technology aid, he said.

From June to November last year, CSR E-Loco trained more than 100 local workers in China on locomotive production, including welding, assembling, quality testing and management skills.