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June 2008

Rail News: Rail Industry Trends

Four Overseas Supply Markets
‘Too Big to Ignore’

Here are four overseas market opportunities for North American rail-industry suppliers that are “just too big to ignore,” says Bob McIntire, president of The McIntire Group, a consulting firm that, among other services, conducts market entry studies, and helps clients develop foreign custom and agent contacts:

Russia — “By 2015, they are anticipating the need for 7,500 locomotives, 8,500 passenger vehicles and 485,000 freight wagons,” says McIntire, who last year spent 180 days visiting overseas countries and rail companies. “They’re doing $9 billion a year in Russia, in terms of capital expenditures.”

India — Freight traffic trends suggest that The Indian Railways will carry 1,100-1,150 million tons per year by 2011 and up to 1,600 million tons by 2020. “India has run out of capacity, so what they’re doing is building a lot of new lines and they’re double-tracking,” McIntire says. “They also are talking about needing somewhere between 30,000 and 35,000 rail cars a year, although they have about seven builders of their own. They currently have about 350,000 freight wagons and 7,000 locomotives. One thing they’re doing is refurbishing all the bogies — about 300,000 of them.”

China — “Another dynamite market,” McIntire says. “They’re talking about huge numbers: 35,000 to 40,000 freight cars a year, and 1,000 locomotives per year. In the next 15 years, they will spend $240 billion in U.S. dollars expanding and upgrading the rail system, according to the [China] Ministry of Railways. They’re looking at having a fleet of 700,000 freight cars operating on their system by 2020. They build their own cars and locomotives there, but what they need is technology in the building of a car — the bogie system, draft gears, all the latest components.”

Brazil — Especially mining and power-generation company/railroad operator Companhia Vale do Rio Doce (CVRD), which owns more than 5,000 miles of railroad tracks. “They’ve got a huge track project going on over the next three years,” McIntire says. “They’re spending about $8 billion to put in a new mainline, they’re double-tracking. It’s just a massive project.”

 — Pat Foran


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