Localising production in the railway industry: Turkey

Wednesday, 15 March 2017 12:29
Localising production in the railway industry: Turkey

Localising production in the railway industry: Turkey

The railway industry is presently imposing a clear requirement for localised production. It is increasingly common for the rolling stock tenders issued by operators to specify a certain fraction of both rolling stock and on-board systems that must be unconditionally localised. This means that a part of the purchases of materials to manufacture the systems, and the assembly of the materials as well, must be conducted in the country that is promoting the project.

This condition leads to companies in the railway industry to implement solutions to meet these requirements either by opening production sites in the specific country or by partnering agreements with local players. By way of example, CAF Power & Automation has concluded a collaboration agreement with Medel Elektronik, a Turkish company that supplies on-board electronic equipment, to approach the market in this country according to the Company's requirements, as this country harvests a highly significant potential for rolling stock demand over the coming years.

CAs a highlight of this new collaboration, CAF Power took the opportunity to exhibit a tram traction converter with production localised in Turkey on the Medel Elektronik stand at the last Eurasia Rail fair, held on March 2-4 at the Expo Center in Istanbul.

CAF Power & Medel Elektronik

Thus, CAF P&A can now count on Medel Elektronik as the Company's strategic partner to meet the demand in the Turkish railway market, where localised production it is estimated to eventually reach up to 60%.

Medel Elektronik is located in Istanbul and has been supplying on-board electronic equipment in the railway sector since 1994. From their headquarters in Istanbul, the company operates in the Turkish market, Asia, the Middle East and Eastern Europe.

CAF Power intends to leverage this alliance to gain foothold in the Turkish market, while Medel Elektronik will benefit from technology transfers in the railway control and power electronic field.

As part of this know-how transfer, Medel will assemble the traction converters at their plants in Istanbul and Sakarya, and in addition, will offer technical support through a team of on-site and customer-based engineers (commissioning, warranty work, maintenance...).

Other localised production by CAF Power: United States and Brazil

Localisation is already under way in countries such as the USA or Brazil, where authorities have been requesting for years that rolling equipment should include a percentage of local materials and assembly within country borders.

After the award of the tender for the supply of control and traction equipment in 2013, CAF Power localised production in the USA for the Kansas Tramway and Cincinnati Tramway projects. In addition, following the award of the tender for the supply of control and traction equipment for the Sao Paulo Metro, Brazil was host for the Company's second localised production project.