Timken Signs Joint Venture Agreement With United Wagon Company (UWC) to Strengthen Presence in Key Rail Market
CANTON, Ohio, March 24, 2014 /PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com) has entered into an agreement with United Wagon Company (UWC), a leader in building, leasing, engineering and servicing freight cars in Russia, to establish a joint venture (JV) to manufacture Timken(R) AP-2(TM) rail bearings in Russia. The JV will advance the safety, reliability and efficiency of the local rail industry, equipping customers' freight cars with premium Timken bearings. The JV is contingent upon various regulatory approvals and other commercial and customary conditions.
"Leveraging the expertise Timken provides as a global leader in high-performance bearing design is critical to our strategy to deliver modern, high-quality freight cars to our customers in Russia and the Commonwealth of Independent States," said Roman Savushkin, chief executive officer of UWC, based in Moscow.
As part of the agreement, Timken and UWC will establish dedicated manufacturing capacity, with construction expected to start within the next several months.
This JV expands upon an established relationship between the two companies, which was formalized in 2013 with a strategic partnership agreement covering technical and design support and an initial supply of Timken AP-2 bearings to UWC.
"The Russian and CIS rail markets present an incredible growth opportunity for Timken as the region is rapidly modernizing its fleet to support its expanding economy," said Brian Ruel, Timken vice president for rail, off highway and light vehicle systems.
The agreement provides both companies a strategic opportunity to capitalize on a surge in demand as the industry advances from using cylindrical roller bearings on freight car axles to the more efficient, reliable cartridge tapered roller bearing Timken originally designed for the rail industry. Russia expects to acquire nearly one million new freight cars by 2030 as part of an aggressive investment program to renew and upgrade its rolling stock.
"Timken is well-established in delivering engineering solutions for demanding environments like Russia, where the terrain and climate can be rugged," Ruel said. "Our AP-2 rail bearings carry the heaviest loads in the world, in the harshest of conditions. Together with UWC, we will set a new standard of performance for the Russian and CIS markets."
About United Wagon Company
United Wagon Company is a leading Russian company that manufactures, operates leases, engineers and maintains modern freight cars. UWC was incorporated in 2012 to manage Tikhvin Freight Car Building Plant (Leningrad region) and RAIL1520, a rolling stock leasing company. UWC's annual production capacity is 13,000 freight cars and 30,000 car sets. The company's owned current fleet is more than 11,000 freight cars.
About The Timken Company
The Timken Company (NYSE: TKR; www.timken.com), a global bearing designer and manufacturer, applies its deep knowledge of materials, friction management and power transmission to improve the reliability and efficiency of industrial machinery and equipment all around the world. The company engineers, manufactures and markets mechanical components and high-performance steel. Timken(R) bearings, engineered steel bars and tubes--as well as transmissions, gearboxes, chain, related products and services--support diversified markets worldwide. With sales of $4.3 billion in 2013 and approximately 19,000 people operating from 28 countries, Timken makes the world more productive and keeps industry in motion.
Source: The Wall Street Journal