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New lease of life

New lease of life

01/02/2013 | Channel: Rolling Stock, Freight

Building on a hard-won reputation, Astra Rail Industries is looking to prove itself a leading competitor in the European freight wagon sector

If the name Astra Rail Industries (ARI) is relatively new to the rail industry, its heritage is certainly not. Established in July 2012, ARI is the owner and operator of three manufacturing plants in Romania, which have long played a leading role in the European freight wagon market. The largest of these facilities is in Arad, which began production in 1891 under original owners Astra Vagoane.

In more than 100 years of activity Arad has manufactured more than 250,000 freight wagons, and successive modernisation means that today the majority of freight wagon types and Y series bogies can be produced at the site, which includes 150,000 square metres of under-roof space. Following privatisation, in 1999 the Arad business was acquired by the US company Trinity Industries.

The other two sites in Drobeta Turnu Severin, and Caracal have their own history. Production began at Drobeta Turnu Severin in 1882 and continues today along with maintenance and refurbishment activities. There is a similar remit of work at the youngest plant in Caracal, which began operations in 1973.

Most recently the three sites were brought together by International Railway Systems (IRS), which as the owner of Drobeta Turnu Severin and Caracal, acquired Arad in 2006 through the purchase of Trinity Industries’ European assets. Although they all had the same owner, the three plants remained separate business entities at this time. Unfortunately when the economic downturn hit IRS was forced into judicial reorganisation, leaving the freight wagon manufacturing in some uncertainty.

It is in such circumstances that Thomas Manns, a German private investor, purchased the sites and formed them into the new business entity ARI. With a combined total annual production capacity of up to 5000 freight train cars of different types, and 357,000 square metres undercover manufacturing space, ARI is one of Europe’s leading freight wagon designers and manufacturers.

“The core business is the same as it was throughout the history of these plants in the manufacture of freight wagons and bogies,” describes sales director, John Brown. “We also offer engineering services for design and testing. The difference is that the new owner has capital to invest in the business, which has enabled us to stabilise the company over the last six months. Now is the time for us to organise the business, and structure it in the way it needs to be for when the market returns, and we have already started this with investment into people and training, new machinery and technologies.”

The heritage attached to the ARI manufacturing sites means it has a strong reputation across the industry. Following the takeover by Thomas Manns, the company is building upon this recovery, and its proven ability to deliver top quality products, with new innovations in design. “We are looking at market requirements and redesigning our current wagons, and creating new lines,” continues John.

“One outcome is to simply make the wagons easier to manufacture. Typically labour rates in Eastern Europe have been very low, but these can only go up as these countries are now part of the EU for example. It is therefore important that we are as efficient as possible in the manufacture of the wagon, and ensure we design these products so we can capitalise on offering customers good value for money. At the same time it makes sense to look at the designs to allow the customer to capitalise on having the best possible product,” he describes.

This includes measures like minimising the tare weight, or reducing the length of the wagon whilst ensuring it still has the same capacity. Likewise, if the length needs to remain the same, ARI is looking at ways to increase the volume. The company not only has the ability to design and build standards wagons such as intermodal, hopper, tank, box, flat, and covered railcars, but also takes on special bespoke products which include complex wagons used for track laying and infrastructure renewal.

Of course the challenge for ARI during this first year of its operations has been to rebuild the trust of its clients and suppliers, and the business has made good on delivering to its word with every wagon arriving to date throughout 2012. Furthermore the company has a number of major clients who have exacting standards regarding quality and on-time delivery, which helps attract some of the smaller freight operators.

Although ARI has a good volume of work for the year ahead, the company is well aware of the general low forecast for the sector. It is recognised in the industry, in order for the freight wagon market to remain constant with zero growth, and for the European fleet not to age, around 12,000 wagons should be replaced each year. Yet, last year there were significantly fewer wagons produced, and the market expects similar low results for 2013, so clearly it’s a challenging marketplace.

Despite this, ARI is confident there is room for it to re-establish itself as a reliable and top-level supplier for the international market, on a long-term basis. With the largest manufacturing potential in Europe for freight wagons, ARI is clearly aiming to become a leader in this sector, yet at the same time pursuing opportunities in Russia and the Middle East. There are a number of ways in which ARI is hoping to achieve this vision, not least by delivering the best quality wagons to customers on time at a competitive price, but also in being a profitable organisation for its owners.