FROM its humble beginnings as a regional supplier in 1986, China South Locomotive and Rolling Stock Corporation (CSR) has steadily grown into a manufacturing powerhouse that is now increasingly challenging the established suppliers on the world stage.

A recent study by SCI Verkehr positioned CSR as the third-largest rolling stock provider on the market. With turnover in excess of $US 15.2 billion, it is just behind Bombardier and Alstom, and ahead of Siemens which has been pushed into fifth place behind CSR's domestic rival CNR. This ascendancy though reflects just the early stages of CSR's long-term plans.

"As part of our five-year plan, CSR has set itself an ambitious target to step into the world's top 500 companies. We are aiming to increase turnover to $US 22.8 billion by 2015," Mr Xu Zongxiang, president of CSR Zhuzhou Electric Locomotive, told IRJ at Middle East Rail 2011 in Abu Dhabi last month. xu-and-kevin.jpg

"There is a high level of competition, but the competitiveness of our products helps us to stand out. They are reliable and safe, and China has consistently shown itself to be a strong area for these products to be produced and sold. We also believe we can be effective in export markets because of the high cost-effectiveness of our products due to low labour costs in China."

In the past the company has formed close working relationships with established manufacturers including Siemens on metro vehicles for Guangzhou metro Line 3, a variant of the Eurosprinter electric locomotive, and a Velaro high-speed train variant. And while Xu is keen to continue these relationships, he says the company is increasingly looking to market its own products under the CSR brand. He also dismissed reports from earlier this year of a future merger between CSR and CNR as a "European-based" rumour.

CSR manufactures all forms of rolling stock across six subsidiary companies. CSR Zhuzhou focuses on electric vehicles - from high-power locomotives with an output of 9.6MW to high-speed trains that operate at up to 380km/h on domestic high-speed lines. The company also has a massive production capacity. It can manufacture up to 1200 electric locomotives, 300 eight-car emus and high-speed trains, 200 diesel locomotives, 10,000 passenger coaches, 20,000 freight wagons, and 300 mass-transit cars per year in China.

In addition to possessing a high production capacity, the company is making significant investments in its testing infrastructure. Test facilities exist for rolling vehicle, car body static strength, brake and electrical systems at its Zhuzhou plant, while it is also constructing a 1.7km maglev test track ahead of the commissioning of a new 60km line in Zhangjiajie national forest in Hunan province in 2012.

Eastern Asia and the domestic Chinese market will inevitably remain strong targets for CSR, but the company is eyeing other areas. The recent sale of light rail vehicles to Izmir in Turkey is its first foray into the European market, while it has significant ambitions to make inroads in South America as that market matures. However, the company's strong presence at the Abu Dhabi conference is indicative of the region it plans to attack first and foremost, a point that Xu is keen to emphasise.

"The Middle East is our number one area of interest, particularly after Qatar was awarded the 2022 World Cup," he says. "We foresee significant investment in this area of the world and we hope to offer our products to serve this future need."

The Chinese government's continuing acts of railway diplomacy, in which developing countries are offered favourable loans to pursue railway infrastructure projects, is certain to pay dividends to CSR's export activities in the future. And as part of its growth activities, Xu says that CSR will not be opposed to working with local manufacturers and even locating production sites outside of China if market conditions warrant such a move.

"In some countries such as Iran and Malaysia we have decided to move production to the country itself and set up our own factories," he says. "These local companies are now doing their own assembly and performing maintenance as well."

Certainly with the Middle East and North African rail market projected to grow by 4.5% in the next five years, CSR is not alone in targeting the region. Other companies including Bombardier, Plasser, Talgo and Vossloh signified their intent to bid for upcoming contracts at the Abu Dhabi event.

And while delegates expressed concern at the status of some projects following political protests and democratic revolutions in the region, most notably in Libya, Egypt and Tunisia, they remain encouraged by developments in Saudi Arabia, Qatar and the UAE. Indeed this month's UITP conference in Dubai is again likely to showcase the region's potential.