Sumitomo Corporation and Nippon Sharyo Joint Venture Awarded a Major Taiwanese Contract for Commuter Train Cars

Contract Outline

Sumitomo Corporation (Chuo-ku, Tokyo; President and CEO: Susumu Kato; hereinafter, "Sumitomo") and Nippon Sharyo, Ltd. (Nagoya City, Aichi; President and CEO: Akira Nakagawa; hereinafter, "Nippon Sharyo") hereby announce that Taiwan Rolling Stock, Co., Ltd. (Hsinchu County, Taiwan; President: Chiang-Ming Chiou; hereinafter "TRSC"), a joint venture partially owned by the two companies, was awarded a contract  to supply 296 commuter electric multiple unit (EMU) train cars for Taiwan Railways Administration (hereinafter "TRA"). The contract amount is equivalent to 44 billion yen, and delivery is scheduled from 2012 through 2015. 

This is the team's second large business win following another contract awarded by TRA in June 2005 for the amount equivalent to 17 billion yen to provide 160 commuter EMU 700 cars. Delivery of the EMU 700s has been completed and all the cars ordered are in full service transporting commuters throughout Taiwan. The EMU 700 has been highly evaluated by both TRA and its passengers for its superior performance, including the comfortable ride and almost trouble-free operation, which encouraged TRA to place a new order for 296 EMU 800 cars. The EMU 800 can run at a faster speed with a maximum operational speed of 130 kilometers per hour, 20 kilometers per hour faster than the EMU 700. TRSC will assure a high level of safety, reliability, maintainability, and Sustainability by obtaining third-party certification and meeting related standards in the design phase, as required in the case of the EMU 700s.

In another key effort, the Taiwanese train car builder will expand domestic production, by locally manufacturing 280 out of the entire 296 cars ordered. The Japanese partner companies will support the Taiwanese venture by building 16 prototype vehicles and providing full technical support.

Prior to this success, Sumitomo and Nippon Sharyo won a joint bid to deliver 136 tilting express EMU cars to TRA for the amount equivalent to 30 billion yen. With  these  two recent major contracts, the Sumitomo/NipponSharyo team are well prepared to provide a variety  of railway cars, which include all the categories of the TRA fleet, ranging from commuter EMUs and diesel multiple units (DMU) to tilting express trains.

Background

Taiwan has recently seen growing investment in railway infrastructure, exemplified by the opening of a high-speed railway developed using Japan's Shinkansen train system technology as well as improved inner-city train networks in and around major cities, such as Taipei, Kaohsiung and Taichung. TRA procured the EMU 800 train to enhance transport capacity between major urban areas, including the Taipei area, Keelung, Yilan, Hualien, Hsinchu, Taichung, Tainan and Kaohsiung, which are located along the two main trans-island lines.

The agency is planning to purchase hundreds of similar railway cars to further enhance operations. Viewing railway network development in Taiwan as a vast business opportunity, the Sumitomo and Nippon Sharyo  established Taiwan Rolling Stock in October 2002 in conjunction with China Steel Corporation and Tang Eng Iron Works Co., Ltd. Sumitomo actively assists in the business management of the new company while Nippon Sharyo provides technical support regarding design, manufacture, quality control and other aspects of the production process, mainly by continuing to send over technical advisors since its establishment. TRSC's recent undertaking is expected to contribute to the economic growth of the region, primarily by creating employment opportunities and increasing local procurement of parts and materials. Currently, as Taiwan's only domestic train car manufacturer, TRSC has received orders from Taipei Metro for EMU cars. Over eight years since its foundation, TRSC has built and delivered more than 400 EMU and other types of train cars.  

Profile of TRSC

Company name:              Taiwan Rolling Stock, Co., Ltd.
Date of establishment:  October 16, 2002
Capital:                              NT$1,392,000,000 (Approximately JPY 4 billion)
Stakeholders:                   China Steel Corporation   44.97%
                                              Tang Eng Iron Works Co., Ltd 18.66%
                                              Nippon Sharyo, Ltd  15.39%
                                              Sumitomo Corporation Group 20.68%
                                              Employees   0.30%