CRRC Corporation

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CRRC Corporation Limited
Native name
中国中车股份有限公司
Public
Industry Manufacturing
Predecessor China CNR Corporation
CSR Corporation Limited
Founded 1 June 2015[1]
Headquarters Beijing, China
Area served
Worldwide
Key people
President: Xi Guohua
Chairman: Liu Hualong [2]
Products Rolling stock
Owner CRRC Group (54.18%)
Number of employees
175,700[1]
Parent CRRC Group
Website www.crrcgc.cc

CRRC Corporation Limited is a Chinese publicly traded rolling stock manufacturer, formed on 1 June 2015 with the merger of China CNR Corporation and CSR Corporation Limited.

At inception it had 175,700 employees, and is the largest rolling stock manufacturer in the world.

The parent company of CRRC Corporation is CRRC Group, a state-owned enterprise that was supervised by the State-owned Assets Supervision and Administration Commission of the State Council.

History[edit]

China CNR Corporation and CSR Corporation Limited, once one company, were separated in 2000.[3]

In late 2014 CNR and CSR agreed to merge, subject to approval by the Chinese state - under the agreement CSR would formally acquire CNR, and the combined business then be renamed China Railway Rolling Stock Corp (CRRC).[citation needed][4][5] Rationals given for the merger were increased efficiency, and the ability to better compete internationally with combined resources.[6]

The merger came into effect 1 June 2015, with each CNR share exchanged for 1.1 CSR shares - the combined company became the largest railway rolling stock manufacturer in the world, and had over 90% of the China market. Total employment of the combine was 175,700 persons, and the share capital was valued at 27,289 million Yuan.[1]

After formation, CRRC began efforts to expand overseas; after being awarded a 284 vehicle order (since expanded to 404 vehicles) for metro cars for Massachusetts Bay Transportation Authority's Red and Orange lines with a $556.6 million bid in October 2014, the company began work on a 13,900 square metres (150,000 sq ft) assembly plant in Springfield, Massachusetts at a former Westinghouse plant,[7] ground breaking on the new plant took place in September 2015.[8]

In mid 2015 production began at a rolling stock plant in Batu Gajah, Perak, Malaysia, a satellite of Zhuzhou Electric Locomotive, and the corporation's first plant outside China.[9] Additionally the former CSR Corporation Limited had acquired Emprendimientos Ferroviarios in Argentina in 2014 and announced in 2016 that they would begin maintenance and production of new rolling stock for export in the country.[10][11] Argentina had previously purchased a variety of rolling stock from the company over the years, including 704 EMU cars, 81 DMU cars, 44 passenger locomotives, 360 carriages, 107 freight locomotives and 3,500 freight cars, in addition to the 150 200 Series cars for the Subte.[12][11][13]

In mid 2015, CRCC formed a freight wagon joint venture, Vertex Railcar, as a minority partner with Hong Kong-based private equity firm Majestic Legend Holdings to establish production in Wilmington, North Carolina at a former Terex facility.[14] CRRC provided railcar designs and some components, and Majestic Legend invested $6 million;[15] the plant was operational by the beginning of 2016.[16] In August 2016, at the request of a letter from 55 US House of Representatives members alleging that Vertex was being unfairly subsidized by the Chinese government, the United States Department of the Treasury began an investigation into whether the Chinese investment in Vertex constituted a national security risk.[17] 42 US Senators sent a similar letter in September, conveying concerns about the state-owned enterprises behind Vertex.[18] The Treasury Department released its report in December and found that the joint ownership was not a risk.[17]

In late 2015, Yu Weiping, the CRRC vice-president at the time, stated the company planned to double overseas sales over five years, with North American passenger rail being one target.[19] Interim six month financial results for the new company showed an increase in overseas revenue of over 60%. Half year revenue was 91.8 billion Yuan, with a gross profit of 19.5 billion Yuan. Non rail revenue (car equipment, generators) was 20.94 billion Yuan.[20]

In March 2016, CRRC (CSR Sifang) was awarded a contract to build 400 7000-series cars for the Chicago Transit Authority (CTA), with an option for another 446 cars. The cost of the contract was $632 million up to $1.31 billion with options; as a consequence CRRC began development of an $40 million assembly factory in Chicago.[21][22]

In March 2017, CRRC was awarded a contract by SEPTA to construct 45 bi-level rail cars with the option for 10 additional cars for delivery in October 2019. CRRC was selected over Hyundai Rotem and Bombardier, which also bid on the bi-level contract and had each produced equipment for SEPTA in the past.[23] Later that month, CRRC was also awarded a contract to build 64 HR4000 cars for the Los Angeles County Metropolitan Transportation Authority (LACMTA) that will replace existing vehicles on the agency's Red and Purple lines, with an option for another 218 cars.[24]

Other investments[edit]

On 8 January 2016 CRRC Corporation purchased 13.06% stake of China United Insurance Holding (Chinese: 中华保险) from China Insurance Security Fund for RMB 4.455 billion.[25]

See also[edit]

References[edit]

  1. ^ a b c "Chinese rolling stock manufacturers merge to form CRRC Corp". Railway Gazette International. 2 June 2015. 
  2. ^ "Senior roles filled at CRRC", www.railwaygazette.com, 25 Jun 2015 
  3. ^ "China's Top 2 Makers of Bullet Trains Merge". New York Times. 30 December 2014. Archived from the original on 19 June 2015. 
  4. ^ "CSR and CNR Joint Announcement" (PDF). Retrieved 11 May 2015. 
  5. ^ "CSR and CNR Joint Announcement Update" (PDF). Retrieved 17 June 2015. 
  6. ^ "CNR and CSR agree merger terms". Railway Gazette International. 31 December 2014. 
  7. ^ Barrow, Keith (22 Oct 2014), "CNR selected to supply new trains for Boston", www.railjournal.com 
  8. ^ "Groundbreaking ceremony for CRRC's US assembly plant", www.railwaygazette.com, 4 Sep 2015 
  9. ^ Barrow, Keith (13 July 2015), "CRRC opens Malaysian rolling stock plant", www.railjournal.com 
  10. ^ "CSR adquiere EMFER y desembarca en la Argentina", enelsubte.com (in Spanish), 26 Feb 2014 
  11. ^ a b "Una empresa china quiere instalarse en la Argentina para fabricar vagones". La Nacion. 27 September 2016. Retrieved 28 September 2016. 
  12. ^ "Dietrich acordó con gigante ferroviario chino instalar taller en el país". El Cronista (in Spanish). 28 September 2016. Retrieved 28 September 2016. 
  13. ^ "CRRC reitera sus intenciones de instalarse en la Argentina". EnElSubte (in Spanish). 30 September 2016. Retrieved 30 September 2016. 
  14. ^ "Chinese manufacturer invests in US wagon venture", www.railwaygazette.com, 6 July 2015 
  15. ^ "Vertex: Signs Of Growth Or Trouble?". Wilmington Business Journal. 19 June 2015. Retrieved 5 May 2017. 
  16. ^ "US-Chinese joint venture delivers first wagons", www.railwaygazette.com, 22 Jan 2016 
  17. ^ a b "Vertex's deal with China cleared by Feds". Star-News Online. 14 December 2016. Retrieved 5 May 2017. 
  18. ^ "Letter to Treasury Secretary Lew regarding CFIUS investigation on Vertex" (PDF). Sen. Jerry Moran. 29 September 2017. Retrieved 8 May 2017. 
  19. ^ Cao, Bonnie (10 September 2015), China Trainmaker CRRC Plans to Double Its Overseas Sales, Bloomberg 
  20. ^ Briginshaw, David (1 Sep 2015), "CRRC first-half profits up while overseas revenue soars", www.railjournal.com 
  21. ^ Barrow, Keith (9 Mar 2016), "CRRC to build up to 846 metro cars for Chicago", www.railjournal.com 
  22. ^ "China's CRRC wins $1.3 bln deal to supply Chicago rail cars", www.reuters.com, 10 Mar 2016 
  23. ^ http://planphilly.com/articles/2017/03/17/septa-to-pick-massachusetts-based-company-to-build-bilevel-railcars-over-hyundai-rotem-in-south-philly
  24. ^ "L.A. Metro inks pact with CRRC for up to 282 new rail cars". Progressive Railroading. March 24, 2017. Retrieved March 24, 2017. 
  25. ^ "ACQUISITION OF 13.06% EQUITY INTERESTS IN CHINA UNITED INSURANCE" (PDF). CRRC Corporation. 8 January 2016. Retrieved 13 October 2016. 

External links[edit]