Bombardier and Power Establish Joint Venture to Manufacture Mass Transit Railcars in China.
Bombardier and Power together and equally will own 50 percent of the joint venture and Sifang will also own 50 percent. This joint venture, which was established with the Chinese government authority's approval, follows a Memorandum of Understanding signed in November 1997.
In support of the joint venture start-up, the Chinese Railways has undertaken a purchase by its Railway Administration of a total of 300 high-grade intercity cars with an option for 200 additional cars. Terms and conditions of the contract are to be finalized in the next few months and production is expected to begin in mid-1999. The total amount of the order, including the option, is estimated on the basis of the feasibility study to be CAN $ 550 million.
The joint venture is investing CAN $ 110 million to establish its 50,000- square meter facility at Sifang's existing factory located in Jihongtan, near the city of Qingdao in Shandong Province. It plans to manufacture a wide range of mass transit railcars for the domestic and export markets, including high-grade passenger rail cars, passenger carbodies, EMUs, luxurious double-deckers, urban rail mass transit vehicles, etc., incorporating the Bombardier technology. Employment at the joint venture is expected to reach 1,300 in approximately three years.
Commenting on this new joint venture, Bombardier Transportation President and Chief Operating Officer Jean-Yves Leblanc stated "We are very pleased to have the opportunity to participate in the modernization of the Chinese railways and to help strengthen the competitiveness of this industry. The expansion of our manufacturing capabilities in this part of the world is another significant step towards achieving our growth objectives."
Mr. Andre Desmarais, President and Co-Chief Executive Officer of Power Corporation of Canada, commented that this is an important step in the development of Power interest in China. He added: " This joint venture is an excellent example of Canadian technology and know-how being applied to the renewal of state-owned enterprises in China. We look forward to successful collaboration with our Chinese partner."
LORIC manufactures rolling stock, locomotives and other industrial products for China's railways and export markets. It comprises 35 manufacturing facilities and four research institutes. Sifang operates one of the best locomotive and rolling stock manufacturing plants in China. Power Corporation of Canada is a management and holding company with interests in Canada, the United States, Europe and China.
Bombardier Transportation, a world leader in the manufacturing of passenger rail cars, is responsible for all Bombardier's operations in the field of rail transportation equipment. It offers a complete range of urban, suburban and intercity vehicles as well as turnkey rail transit systems worldwide. It also manufactures freight cars and provides operations and maintenance services. Bombardier Transportation is the leading supplier of passenger rail cars in North America, where its activities are carried out by Mass Transit - North America and Transit Systems (Canada), Bombardier Transit Corporation (USA) and Concarril (Mexico). In Europe, Bombardier Transportation operates manufacturing facilities in Austria, Belgium, the Czech Republic, France, Germany, Switzerland and the United Kingdom.
Bombardier Inc. is a Canadian corporation, active in the fields of aerospace, rail transportation equipment, recreational products, financial services and services related to its products and core businesses. It operates plants in 11 countries in North America and Europe and more than 88 percent of its revenues are generated outside Canada. Bombardier's revenues for its fiscal year ended January 31, 1998 totalled $8.5 billion.
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|Date:||Nov 20, 1998|
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