Hyundai Rotem inks $1.5 bn Morocco train supply deal

South Korea’s Hyundai Rotem Co. said on Wednesday it has won a 2.2 trillion won ($1.5 billion) train order from Morocco, the biggest single deal for its railway business, to expand its presence in Africa.

The rolling stock and defense manufacturer under Hyundai Motor Group said it signed a contract to supply double-decker trains to Morocco's state-owned rail operator Office National des Chemins de Fer (ONCF).

The trains with a maximum speed of 160 kilometers per hour (99.4 miles per hour) are set to connect Morocco’s largest city Casablanca with the country’s major regions. The service is scheduled to open in stages ahead of the 2030 FIFA World Cup in Morocco.

Hyundai Rotem and Korea Railroad Corp. (KORAIL) plan to jointly provide maintenance services for the trains through a separate contract with ONCF.

“The (train supply) deal is expected to accelerate the Korean railway’s expansion in Africa,” Hyundai Rotem said in a statement. “The entry into the Moroccan market will help us build up relevant experience and be more competitive in winning orders.”

The contract, which represents 61.4% of Hyundai Rotem’s total sales of 3.6 trillion won last year, has further boosted the company’s order backlogs. The backlogs have nearly doubled to 14.1 trillion won as of the end of 2024 from 7.1 trillion won in 2020.

Hyundai Rotem has already secured major overseas orders, including two deals totaling 2.7 trillion won from Australia and a $663.7 million contract from Los Angeles, California.

ONE TEAM KOREA

Hyundai Rotem said some trains for ONCF will be manufactured in Morocco although about 90% of the parts will be supplied by some 200 South Korean contractors.

KORAIL, South Korea’s state-run company, proposed technology transfer and training to ONCF as the national railway operator seeks to secure core maintenance technologies.

South Korean government officials have lent their support to Hyundai Rotem.

Minister of Land, Infrastructure and Transport Park Sangwoo and Vice Minister for Transport Baek Won Kug met with Morocco’s Minister of Equipment, Transport and Logistics and the head of ONCF last year.

South Korea’s foreign ministry also met with its counterpart and the Speaker of the Moroccan House during the 2024 South Korea-Africa Summit in Seoul.

Hyundai Rotem has worked in the railway business with South Korean contractors in African countries such as Tunisia, Tanzania and Egypt.

Write to Bo-Hyung Kim at kph21c@hankyung.com
 

Jongwoo Cheon edited this article.