Sampyo targets India’s railway track parts market

 
Sampyo Railway Co., South Korea’s No. 1 railway turnout manufacturer, plans to launch a joint venture with an Indian company within the year to accelerate its penetration into India’s turnout market, its chief executive said.

A turnout is a railway switch that guides railway trains from one track to another. When the turnout rusts, malfunctions, or falls off the track, it can cause the train to derail. 

“Because of India’s old train systems, many railway track accidents occur in the country. We want to supply more advanced turnout machines,” Sampyo Railway CEO Cha Jae-jung told The Korea Economic Daily on Sept. 8.

“We have delivered related machines (to India). Our ultimate goal is to win turnout orders.”

The affiliate of Sampyo Cement Co. shipped two flash butt welding machines used to attach turnouts to rail tracks for a total of 5 billion won ($3.8 million) between late 2021 and early this year.

These were its first shipments to India, the world's most populous country and with the longest railway network. Some 22 million commuters in the country use trains daily.

“It is very difficult for foreigners to do business in India and even if you are doing well, you can suddenly be pushed out,” Cha said.

“So, we are treading cautiously. We expect it to be established within the year,” he said in reference to a JV in India.

Sampyo has built its presence in other parts of Asia after winning a string of railway track-related orders from Taiwan, Pakistan and Iran, as well as South America.

Particularly in 2021, it beat a Japanese rival to supply 1,600 units of turnouts for the Taiwan Railways Administration’s repair project.

Sampyo was founded in 1980 as a railway department of Kangwon Industry Co. and was spun off in 1994.

It has supplied train track components for South Korea’s high-speed train KTX and subways. It offers maintenance, repair and operations services for those railway networks.

But its order book for such large-scale projects will likely be thinning after high-speed railway projects such as Great Train eXpress (GTX) rail networks under construction within the Seoul Metropolitan Area and one between Daegu and Gwangju are completed.

“We will grow to be able to design turnouts on our own and become a truly comprehensive railway track engineering company,” Cha added.

Sampyo expects its sales to grow 40% on-year to 130 billion won this year. In 2022, it posted 93.2 billion won in sales with an operating profit of 6.8 billion won.

Write to Hyung-Chang Choi at calling@hankyung.com
 


Yeonhee Kim edited this article.