SEI Starts Railcar Rubber Parts Production in China with KTK

Sumitomo Electric Industries (SEI) and the subsidiary, Tokai Rubber Industries, announced on Monday they establish a joint venture company in Changzhou City, Jiangsu Province, China with KTK Group, Chinese major supplier of railcar interior parts. The JV will produce and sell air spring and anti-vibration rubber for railcars. The JV will be established in September 2009 and start productive operation in February 2010. The JV targets annual revenue at 170 million yuan (approximately 2.4 billion yen) in 2012.

The JV’s capital is 30 million yuan, 27.5% shared by SEI, 27.5% by Tokai Rubber Industries and 45% by KTK Group. The JV will employ 50 staffs and workers in 2012. SEI Group expects for the JV’s high cost competitiveness and bargaining power for railcar parts, when high-speed railways to connect major cities and subways in large cities are rapidly constructed.

KTK Group, headed in Changzhou, holds a large market share of interior parts and display devices for railcars in China. Its bargaining power is strong for domestic rail vehicle makers. There are 2,100 employees in the Group. The capital is 120 million yuan. For the JV establishment, Wujin area of Changzhou City offered much assistance, where Chinese railcar manufacturing industry is concentrated.

Two air springs are generally applied between a bogie and a railway truck to decrease vibration propagation from wheels to railway trucks. In China, total 16,000 kilometers of middle- and high-speed railways are scheduled to be established.