CNR division in Tangshan on track to move world

High-speed trainmaker picks up steam in global operations, reports Lan Lan in Tangshan, Hebei.

Sun Binbin's family has worked for three generations for China's first railway factory, now owned by Tangshan Railway Vehicle Co, a subsidiary of CNR Corp. The factory is based about 150 kilometers from Beijing in Hebei province.

"My grandfather would be more than 90 years old if he still lived. My father retired from the same factory, and I work here, too," said Sun, 37.

But Sun is unlike the older generations of factory workers. She was one of the first female technicians with a high-level certification to train technicians welding aluminum alloy, and her signature is recognized globally.

She earned the certificate in Germany after several months of overseas study, and she has trained more than 500 technicians since then.

Sun and her students work on the bodies of multiple, high-speed electronic train units. The work involves the high precision, manual welding of nearly 100 types of sheet metals with a minimum thickness of 2mm.

The aluminum alloy car bodies have been exported to Europe and many other parts of the world.

The predecessor of the company Sun works for was founded in 1881 as a locomotive and rolling stock works. The factory in Tangshan has reshaped itself into a global supplier.

High-speed trains covering the Beijing-Tianjin, Beijing-Guangzhou and Guangzhou-Shenzhen routes, which travel as fast as 394 kilometers per hour, were made in the factory. Its products have been exported to more than 20 countries.

Assembly, including wiring, is another step that demands precision.

There are more than 100,000 wires and cables in one vehicle and they control functions such as traction, control and communications.

Like in ancient China, when some craftsmen carved their names in a corner of their handiwork, the wiring workers' names are included on many small yellow plates on cables inside high-speed trains assembled at the factory.

Hao Shuqing, a company executive, said thousands of such plates travel around the world with the vehicles.

"We require our workers to mark their name on all critical places. It's a kind of credit for them, and the information is input into a computer so we can track it if there's any problem," Hao said during a field trip to the plant.

Parent company CNR, one of the world's largest suppliers of railway transportation equipment, has exported its products to more than 84 countries and regions. CNR's exports were valued at $3 billion in 2014, up 68.6 percent year-on-year.

China is talking with 28 countries, including the United States, Russia, Brazil and Thailand, about supplying high-speed trains, said Yu Weiping, vice-president of CNR, who is in charge of the company's overseas business.

Yu said CNR is able to independently develop all critical technologies, including traction, braking and network control systems.

In addition to its national-level research and development centers in China, it has a traction and control system R&D center in the Czech Republic and a welding structure R&D center in the US state of Michigan. Plans call for a new R&D center in South Africa to provide products better adapted to local conditions.

"China has the most complicated and stringent operating environment for railways, so if rolling stock can operate well in China, usually it will be applicable to all kinds of environments in other countries," Yu said.

For example, the 2,264 km railway linking Harbin and Wuhan crosses several climatic zones with a temperature variance of 26 C.

Another example is the railway linking Wuhan and Guangzhou, which has more than 200 tunnels and bridges, a rarity worldwide.

By the end of 2014, China's railways measured 112,000 km, including 16,000 km of high-speed rail, and carried an average of about 2.32 billion passengers a year, according to officials.

The US will be the next strategic focus for CNR, Yu said. The company secured a 4.12 billion yuan ($659.38 million) contract last year to supply train cars to Boston's subway system, the first US rolling stock order for a Chinese company.

Some of the vehicles will be assembled at a Boston manufacturing facility that will be used as a base to assemble vehicles for other US cities, Yu said. The company said it also is looking at opportunities in cities such as New York and Washington.

It also will establish a manufacturing company in South Africa, he said. The company won a contract last year to supply 232 diesel locomotives to the country.

CNR delivered multiple electric units and subway trains used during the 2014 FIFA World Cup in Brazil. They were made at CNR Changchun Railway Vehicles Co.

With 27 subsidiaries, CNR has a production capacity of 1,000 units of electric and diesel locomotives; 4,000 high-speed train cars, metro cars and multiple units; and 30,000 freight wagons and other kind of wagons.

It has established joint ventures in the US, Australia, New Zealand, South Africa, Iran, India, Malaysia and Thailand.

CNR and CSR Corp, China's top two high-speed train manufacturers, have announced a plan to merge to become the world's largest train manufacturer. Shareholders will vote on the move on March 9.

Antitrust scrutiny in the international market is "an issue" facing the merger of the two biggest trainmakers in China, Yu said. They have established a working group to study future strategy and deal with issues related to domestic and international agencies and governmental bodies, he said.

"A successful merger of China's top two train manufacturers will avoid internal competition and form a combined competitive edge," he said.

The Boston contract won by CNR suggests that "Chinese railway technology is no longer seen as an obstacle to access the more demanding Western markets", said a recent report by Moody's Investors Service Inc.

"The merger of the two companies is negative for France-based Alstom, Canada-based Bombardier Inc and Germany-based Siemens Aktiengesellschaft because it will create a stronger competitor in the already competitive global market for railway and metro transportation equipment," said Roberto Pozzi, a senior credit officer of Moody's, in the report.

Both CNR and CSR have yet to win rolling stock contracts in the European market, which is a challenge given that the region has mature manufacturers and stringent requirements for market entry. Other Asian players such as Hitachi Ltd's Hitachi Rail and Hyundai Motor Co's Hyundai Rotem have gained a slice of the market.

"There is no barrier for CNR to go global because we have grasped all the core and critical technologies of railway transportation equipment," Yu said.

Exports of China's railway equipment hit 26.77 billion yuan in 2014, a year-on-year increase of 22.6 percent, according to the General Administration of Customs.