Voith Turbo eyes China's train upgrades
By Jiang Jingjing (China Business Weekly)
Updated: 2004-11-24 09:04

Voith Turbo, a leader in the development of power transmission products, pledges to get involved with China's railway upgrading projects, especially after the company's success in the nation's urban metro business.

Hermut Kormann, president and chief executive officer of Voith Group, said the power transmission business will be the force that drives the firm in China over the next few years.

"Voith Turbo can help China increase efficiency when utilizing power, which can meet the country's urgent needs, along with the fast-growing economy," he said during his visit in Beijing earlier this month.

Birgit Suberg, managing director of Voith Turbo Power Transmission (Shanghai) Co Ltd, said the firm has established its reputation in China as an expert in light rail and underground line.

The firm, Suberg added, will now focus on the more profitable, long-distance railways.

The German giant is eyeing China's projects to upgrade its trains, which will increase the current railway transportation speed on all of the nation's rail lines from 80 kilometres per hour to 200-350 kilometres per hour.

"We have brought the world's most-advanced technology to win orders for power transmission parts for 200 high-speed trains, which is the firm's first trial in China's long-distance train business," Suberg said.

Voith Turbo holds 80 per cent of the European market, in terms of sales of transmission parts for high-speed trains in Europe, she added.

China's Ministry of Railways recently called for public bids involving the production of 200 high-speed trains.

French giant Alstom, Japan's Shinkansen, German firm Bombardier and local manufacturers Changchun Railway Vehicles Co Ltd and Nanche Sifang Locomotive Co Ltd have won bids.

Voith Turbo is staying in close contacts with those firms, and is expecting to provide them with the transmission technology.

Over the long term, Voith Turbo hopes to win an order to supply transmission parts for the Beijing-Shanghai high-speed railway project. The initiative remains at the approval stage.

The line, which is expected to cost more than 100 billion yuan (US$12.08 billion), has caught the attention of several foreign firms -- including Alstom, Siemens and Shinkansen.

Suberg said Voith Turbo can provide couplers and gear axle drives, which can increase a train's speed by at least 50 per cent, while guaranteeing a safe, comfortable journey.

The firm began exporting its products to China in 1992, when it had a contract to supply parts to Shanghai's No 1 metro line.

In 2001, Voith Turbo established a factory in Shanghai and, the following year, began selling made-in-China products. The move was aimed at reducing the costs of the products, and at meeting China's "localization" requirements.

Chinese Government's rules stipulate the nation's railways must have 70 per cent local content.

Voith Turbo's revenues -- 8 million euros (US$9.6 million) last year were three times greater than they were in 2002, Suberg said.

"We started with projects in developed cities, where there is greater demand for high technology. Now, with the colossal project of upgrading trains, we have decided to extend to the business," she said.

Voith Turbo believes co-operation with its Chinese partner, Changchun Railway Vehicles Co Ltd, has helped it strengthen its presence in China.

Voith Turbo and its Chinese partners commonly use diagrams to ensure they communicate effectively, and then reach a consensus on an action plan, she added.

Voith Turbo's Chinese partners always provide valuable expertise about local operations, Suberg said.

Voith Group, which is Voith Turbo's parent, has businesses in paper machine manufacturing, hydro power generation and fabric production.

The group has 14 subsidiaries in China and employs 833 employees.

Last year, Voith Group received orders worth US$726 million in China, which accounted for 10 per cent of the group's worldwide revenues.

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