The Russia-Ukraine crisis has prompted railway PSU Braithwaite & Co to hold back its deal with Ukraine for supplies of 5,4000 railway wagons, the biggest export order the PSU bagged while in its course of turnaround.
Braithwaite chairman and managing director Yatish Kumar told FE the Rs 1,300-1,400-crore deal was at a matured stage. A Ukranian government team visited Braithwaite’s facility last month and “we blocked a platform to manufacture wagons for Ukraine. We were supposed to sign an MoU next month in this regards but have been forced to hold it back for at least next three-four months in the context of the war,” Kumar said.
Although the company was keen to resume the deal and still remained upbeat in tapping export markets, “in a situation of uncertainty, it requires tweaking its business plan and looking more aggressively into the domestic market. The railway PSU, after having exported 350 bogies to Myanmar in 2020, had set up an office in Mumbai with a chief executive officer heading it to peruse export markets. The PSU was in talks with the Central Ware Housing Corporation (CWC) to utilise its spare land, partly leased out by the Syama Prasad Mukherjee Port Trust (SMP) and partly by the West Bengal government to make railway sidings and storage facilities, vital for executing export orders.
Braithwaite’s Kolkata Works has 23.0831 acres of land and Angus’ 69.981 acres, of which 16.556 acres and 9.900 acres are built up, respectively. So the balance land was planned for utilising in warehousing. While this deal could play a major role in the company’s course of turning around, the company — which has recently been awarded a mini Ratna status — to remain on the growth path has at present focused on container manufacturing, which down the line could culminate in improving the country’s logistics performance index (LPI).
Braithwaite, with a current order book of Rs 2,000 crore, was executing container manufacturing orders worth Rs 16 crore. “We have created a capacity of making 200 containers per month at our Aungus Works and we shall shortly take it up to 500 per month. SAIL has started making and supplying speciality steel to us for container-manufacturing and we are on a spree to reduce our dependence on container imports,” Kumar said, adding, China has become the global hub of container manufacturing with 90% of the global container requirement being supplied by them. .. While India can shortly turn out to be a second global hub for container-manufacturing, the initiative in line with the national railway plan envisaging increased freight co-efficiency, can help bring down India’s cost of logistics to the level of the present global average of 6-9% from 13-18% it is struggling with, Kumar said.
Braithwaite is currently supplying containers to Concor and DP World despite its ambitions of exporting wagons has taken a back seat. The company was supposed to only supply wagons frames without any wheels and frames were also agreed to be supplied in parts and pieces to Ukraine. But the temporary halt in executing the export order wouldn’t deter Braithwaite’s growth since as a strategic PSU it has entered into an MoU with the Research Designs and Standards Organization (RDSO) to manufacture new design prototype wagon with customised solutions. The development process has already been completed. The company is ready for the series of production.
Currently, only Konkan Railways is running with old-design wagons. The new design will give more flexibility with cost effectiveness. The company which is getting engaged in making double stack containers and cuboids along with introduction of new design roll-on-roll-off wagons, would bring fresh life to rail transportation to boost domestic as well as EXIM traffic, Kumar said, adding these new orders would leap-frog the PSU’s performance as its focus on service and repairs would continue to remain intact.
from The Financial Express https://bit.ly/3pu0dy3
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