Chinese railway suppliers on fast track to world market(2)

The Chinese company, which started its wind power business in 2004, generated about 6 billion yuan ($960 million) in sales last year, with revenue from the wind power industry accounting for 30 percent to 40 percent of the total.

Unlike CSR Zhuzhou Electric Locomotive Co, another CSR unit that has been selling rolling stock to the global market for nearly 20 years, CSR ZEM started exports only in the past few years.

Apart from the wind sector, the company plans to make the most of its major products, which are electric traction motors and transformers, as it drives into the export market. Countries such as India, South Africa and Russia are among its targets for initial orders in the rail sector.

"We are likely to break new ground this year, making inroads into these countries, but it will be no easy task. As a newcomer, we have to compete with the international sector leaders," Ouyang said.

Zhao Jian, a professor of rail transportation at Beijing Jiaotong University, said that the countries being targeted have well-developed transport systems and most of them are open to foreign investment, which makes them easier targets for exports than other countries.

South Africa's air and rail networks are the largest on the continent, and India's railway system also ranks among the world's largest.

"They are very good markets for rail development, offering a solid base for rail construction," he said. "But it also means that Chinese companies have to face fierce competition with very strong domestic rivals as well as international bidders."

The global bidders include Germany's Siemens AG, Canada's Bombardier Inc and Japan's Kawasaki Heavy Industries Rolling Stock Co.

Chinese companies also have to cope with a stronger yuan, which will have "a certain negative impact" on exports, he said. But Chinese companies do have one advantage: they can provide a fair price while offering high quality.

Ouyang said that if the company can get its first foreign order, it will be just a matter of time until other contracts roll in.

He said that although export revenues are basically nothing now, they will grow fast, accounting for at least 30 percent of the total in the next five years.

"Compared with the international giants, we are very flexible, so we can turn orders around quickly," he said, adding that maintenance will represent yet another big market once the company is shipping electric motors and wind power generators.

The future looks bright. Premier Li Keqiang has been promoting high-speed rail technology in Thailand, the United Kingdom, Russia and India. And to reduce competition among Chinese companies in the global market, State-owned train manufacturing companies CNR Corp Ltd and CSR Corp Ltd have decided to merge into a $26 billion company. China Railway Construction and China Railway Group will focus on tracks.