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Overview – Polish rolling stock manufacturers

For several years, Polish manufacturers of rolling stock have been paying close attention to the terms of tenders for supply of new trains and trams abroad. Manufacturers such as Pesa Bydgoszcz and Solaris are managing to sell their products beyond the borders of Poland, and Newag Nowy Sącz (listed on the Warsaw Stock Exchange) has also begun expanding in this area.

Poland is a country with a rich railway tradition – the country’s economy is based on coal, which has practically always been traditionally delivered by rail. Accordingly, the number of companies producing or repairing rolling stock in Poland has always been many. They were all part of the state railway until 1989, but everything changed with the advent of the free market because companies needed to find ways to adapt to new market realities. Most did not succeed in doing this. More than a dozen companies that still exist today were mostly completely dependent on orders from national railway companies until recently.

Poland’s entry into the European Union created opportunities for entry onto foreign markets and the resources they attracted from the European Union allowed them to grow, for example, by meeting the requirement for trams, which were being upgraded in Polish cities and other cities in the European Union.

Of course, there is also high demand for rolling stock on the Polish market, where it is necessary to replace about 1,000 electric trains. “According to Zespołu Doradców Gospodarczych TOR, expenditures of about PLN 37 billion or about EUR 9 billion is needed to meet the requirement for modernization of rolling stock in Poland,” said Bogusław Kowalski, a partner and general director at the ZDG TOR consulting company, which also started working on projects in Ukraine recently.

There are several development scenarios for manufacturers of rolling stock from Poland. The first scenario is the possibility of broad diversification of production – rolling stock for urban transport, export to foreign markets, and production of specialized equipment. Pesa Bydgoszcz and Newag Nowy Sącz are partially implementing such a strategy. The ZPS company also emerged to successfully occupy the niche of specialized equipment for repairing railway infrastructure.

Newag took advantage of the opportunity to enter into all sorts of alliances with foreign producers (GE, Siemens, or Stadler). Thanks to this, the partners managed to reduce their production costs and share technology.

Another strategy was acquisition by a foreign concern or a financial group. Usually, this means the end of production under the acquired company’s own brand, but it allows the acquired company to preserve jobs and develop under a different brand (this route was taken by Konstal Chorzów, for example, which was acquired by Alstom, and Pafawag Wrocław, which was absorbed by Bombardier).

Pesa: East, West, and South

620M fot. PesaPesa Bydgoszcz has become a Polish hegemon in a very short period. The company has grown from the state-owned company Zakłady Naprawczy Taboru Kolejowego into a joint-stock company owned by its management. The company dominates the domestic market of new trams, and it has also started production of new electric locomotives. Pesa is aspiring to create a full production cycle – it has created its own design bureau and a holding consisting of specialized firms.

The company usually bids on tenders on its own (the exception was a joint bid with the Canadian-based Bombardier to supply 20 trains to PKP Intercity) or with the right to cooperate with a local partner in the case of a foreign tender (for example, the tender for supply of trams to Moscow).

Pesa Bydgoszcz aspires to maximum diversification of its portfolio of orders. In 2008, the company acquired ZNTK Mińsk Mazowiecki, which engages in modernization of electric trains (mostly EN57) and assembly of low-end diesel trains.

Pesa took its first steps on the export markets in the east, where its 610M and 620M diesel trains are selling successfully: first in Ukraine and then in Belarus and Lithuania. The next step was the sale of Atribo diesel trains to Ferrovie del Sud Est, Ferrovie Nord Milano, and Ferrovie Emilia Romagna in Italy. The culmination of this area of expansion was a contract for supply of 40 trains to the state-owned Trenitalia.

In 2011, Pesa managed to enter the markets of Germany and the Czech Republic (with the Link diesel trains). The manufacturer first signed agreements with the Czech Railways (31 trains) and the regional Regentalbahn (12 trains), as well as a framework agreement with Deutsche Bahn (470 trains). The final agreement also includes two contracts with DB Regio for purchase of 36 + 9 trains. The most recent contracts signed by the Bydgoszcz-based company are for supply of nine Link trains to Niederbarniemer Eisdenbahn and three 730M trains to Belarus.

In 2009-2013, Pesa signed several contracts for manufacture of trams for Szeged (Hungary), Cluj (Romania), Kaliningrad (Russia), and Sofia (Bulgaria). The largest in this segment was the contract for supply of 120 trams to Moscow, which was signed in June 2013. The Polish company is cooperating with Uralvagonzavod on implementation of this order. Russia is definitely a huge market, but Pesa is bidding on tenders in Brazil, for example, because it is trying not to focus narrowly on the Russian market.

Newag: Italy and Croatia

Newag Nowy Sącz, which is listed on the Warsaw Stock Exchange, took a different path. Its majority shareholder is Zbigniew Jakubas. The company is well positioned on the market of modernization and production of locomotives, and it is also developing a niche in production of diesel trains. It has also created the first prototype of the Nevelo tram.

In its operations, Newag uses the best practices from its partners, including EC Engineering and, earlier, General Electric. The company cooperates with major Western European manufacturers of rolling stock (Siemens and Stadler) and learns from their experience. The company has managed to enter the markets of Italy and Croatia.

Newag’s development began in 2008, when it acquired ZNLE Gliwice (which engages in manufacturing of electric locomotives). In December 2013, Jakubas’ company received an order for production of 10 diesel trains for Italy. As of today, the first four trains under this contract have been confirmed. Moreover, the Polish company signed an agreement with Đuro Đaković Specijalna Vozila (Croatia) on joint production of Griffin electric locomotives in May 2014. In addition to joint production and technology sharing, it was agreed that the Croatian company would sell products on the markets of third countries and Newag on the Polish market.

Solaris: Germany

The Solaris company, which has long been known on the market as a manufacturer of buses and trolleybuses, is taking a completely different route to development. The company also began producing trams in in 2011 and some of its plans indicate a desire to build electric trains. The manufacturer has managed to sign three foreign contracts for supply of trams. The first contract was for supply of five trams to Jenaer Nahverkehr GmbH (July 2012). The other two contracts were for supply of 15 trams (July 2012) and three trams (May 2013) to Braunschweiger Verkehrs AG. Earlier, Solaris supplied 45 Tramino to Poznan and signed an agreement for supply of 15 trams to Olsztyn.

The domestic market has become too small for the largest Polish manufacturers of rolling stock. Foreign expansion is now the only chance for further development, both technologically and economically. Time will tell whether these companies will soon become widely recognizable representatives of the Polish economy. The European Rolling Stock Forum 2015, which will be held in Warsaw from 10 to 11 March 2015 in media partnership with the Think Railways, will provide a unique opportunity to make contacts on the market of rolling stock.

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