Railway Gazette

In barely a decade, United Wagon Co has become one of Russia’s leading builders of freight rolling stock. Vladimir Waldin reports from Tikhvin.

With a history dating back more than 600 years, Tikhvin is a small town around 200 km east of St Petersburg, with a population of 60 000 inhabitants. A decade ago it was a depressed community, dependent on a single main employer with unclear prospects, but today it has been transformed into a vibrant rail industry cluster with several plants employing more than 10 000 permanent staff. And that is predominantly thanks to the emergence of United Wagon Co as a major player in the Russian rail market.

Tikhvin’s population quadrupled in the 1960s, after the St Petersburg-based Kirov Works, best known for its Sovietera heavy-wheeled tractors, established its Transmash foundry business (not to be confused with today’s TMH), in the town. But the political and economic upheavals of the early 1990s saw the core business collapse, forcing the management to find alternative customers. The firm branched out into the production of special-purpose railway rolling stock. Some designs were successful, but others less so — notably the experimental ‘Sokol’ high speed EMU, developed in co-operation with local firms. This was a victim of both organizational changes and engineering deficiencies, and was destined never to enter series production.

Although Transmash continued to decline, the town’s fortunes began to reverse in 2008, when the ICT Group investment venture backed by governmentowned development bank VEB and the Eurasian Bank for Development broke ground on the Tikhvin Freight Car Building Plant. Now UWC’s flagship, TVSZ was built from scratch for around 45bn roubles, using an underdeveloped part of the Transmash site. Completed of 7bn roubles the following year, and turnover has been growing steadily ever since.

UWC was established in 2012 as a holding company, bringing together its backers’ various rail activities, including research, production and maintenance, rolling stock leasing and freight operations. Last year ICT Group withdrew from the business, which is now predominantly owned by Otkritie Bank & Holding, and other strategic investors; following a flotation 272% of the shares are publicly held.

International accords

International co-operation and global standards have always been at the core of the group’s strategy. In 2010 TVSZ signed a technology transfer agreement with Wabtec Corp, giving it the exclusive rights to manufacture and market the Barber S-2-R bogie across the 1520 region. By September of that year, the Type 18-9810 bogie with a 235 tonne axleload, based on the Barber design, had received its compliance certificate.

The Barber bogie has subsequently been further developed into the 25 tonne Type 18-9855, which remains the linchpin of the UWC product range. It is worth noting that the Type 18-100 bogie of 1955, which became almost universal across the former USSR freight fleet, also had American roots.

That initial agreement with Wabtec was soon followed by another with Mitsui to support the purchase and leasing of freight wagons. A second deal with Wabtec covered the development and production of innovative components for heavy haul rolling stock, including for North America. Finally, an agreement with Timken enabled the 25 tonne bogies to be equipped with box cassette bearings. All of these agreements were firmed up into joint ventures, while a plant was established in Tikhvin to manufacture Timkendesigned spherical roller bearings.

Today, UWC has four production facilities, of which three are in Tikhvin. Between them, TVSZ and the specialist wagon plants TikhvinChemMash and TikhvinSpetsMash can produce up to 22 000 vehicles per year. Izhevsk-based NPC Pruzhina manufactures up to 30 000 sets of bogie suspension springs annually. Since the group was founded in 2012, total production had reached 80 600 wagons by the end of 2018.

Wagon maintenance business Titran-Express can repair up to 3 500 vehicles per year at its Tikhvin facility, while UWC affiliates maintain wagons at more than 70 sites across the CIS and Baltic countries. The group’s Vnictt research and development centre is located in St Petersburg. UWC operates several leasing companies under the Rail1520 brand, while its Unicon 1520 arm has expertise in liquid cargo logistics; all of these use rolling stock manufactured by the group.

Wagon building

Despite this diversity, freight car production remains the key business, with an expanding product line that currently includes 57 models, thanks in part to various bespoke orders placed with TikhvinSpetsMash. By volume, the most prolific types are solid-bottom gondola cars and LGA gondolas with a so-called ‘longitudinal gate arrangement’. Indeed, the inaugural LGA gondola, produced on January 30 2012, with its chalk signature by the then Prime Minister Vladimir Putin, has been preserved on a plinth by the factory gates as a sort of plant mascot. The gondolas are followed in decreasing quantities by various hopper and timber wagons, vans, side-dump and tank wagons.

UWC’s 50 ha complex south of the town hosts wagon assembly and maintenance shops, plus the foundry that makes specialist railway castings and the bearing manufacturing plant. Nothing is built for stock, all orders are managed by the Infor10 ERP Enterprise IT system, and completed vehicles are outshopped in a range of branded liveries for different customers.

On a typical day in April, the TVSZ plant was assembling 36 LGA gondolas, 11 hopper wagons of 101 m3 capacity and 18 of 120 m3, along with four intermodal platform wagons. Full capacity of the three plants is around 60 vehicles per day. TVSZ was initially designed for 10 000 wgons/year, but in 2018 the group’s three plants delivered 19 700 vehicles and this year’s production programme is much the same.

Apart from non-metallic elements and consumables, wheels and axles are the only components procured from outside suppliers. Everything else is produced in house from either rolled metal sheet or beams. There is a high degree of automation, with production robots procured from numerous European suppliers, while the moulding plant uses Canadian machinery.

In the foundry, two upgraded Siemens arc furnaces melt around 100 000 tonnes of steel per year to make bogie and coupler castings for both domestic customers and export. Under a 10-year contract, the plant dispatches containers full of castings for lightweight Barber S-2-HD 325 tonne bogies to the USA every two or three days.

Besides the expanding export activities, the lightweight bogie design remains the defining feature of the socalled ‘new-generation railcars’. UWC estimates that the ‘Barber-effect’ cuts a bogie’s life-cycle costs by up to 50%, with repair intervals extended from three to eight years. Payloads can be increased by 10%, while track forces are reduced by 3%. This means that empty wagons can be hauled at 120 km/h rather than 70 km/h, reducing cycle times.

Unlike competitors Uralvagonzavod and Altayvagon, UWC only offers its domestic customers wagons with 25 tonne bogies. Nevertheless, its domestic orderbook for the coming year is full.

By the end of 2018, the average price of a four-axle new-generation wagon had reached 3.6 to 3.9m roubles, a 20% increase on 2017 and up by 150% on 2015 as a result of rapid inflation. Government support for new wagon orders (RG 6.17 p49) totalling 2bn roubles last year, worth an average of 300 000 per vehicle, has helped to stimulate the market, although many customers are still buying older designs at around 2/7m roubles each.

Nevertheless, 104 000 of the 530 000 gondola cars operating in Russia are 25 tonne new-generation models, and dynamic testing with a pilot batch of cars using 27 tonne bogies is returning positive results. The most noticeable impact of the once-extensive government support is that Russia now has the world’s youngest freight wagon fleet, with an average age of less than 13 years, compared to 237 years in the USA and 27 years for western Europe.

Articulation initiative

Although articulated wagon designs are becoming more common around the world, the concept had never made much progress in Russia. UWC introduced a pioneering gondola prototype in 2016, and designs for pre-series six-axle articulated tank and container wagons appeared the following year. The company presented a prototype 1,435 mm gauge articulated container flat car with a payload capacity of 107.5 tonnes at InnoTrans in September 2018, and a couple of months later won an international tender to supply 130 similar vehicles to DB Cargo. Designated Sggrs80, these will have a slightly bigger payload of 108.6 tonnes, and are due for delivery in the first half of 2020. The new wagons are intended to carry standard ISO containers, tank containers and swap bodies with a gross weight of up to 36 tonnes. The contract includes an option for an undisclosed number of extra vehicles.

Another breakthrough product is the 24 m six-axle articulated Type 15-9541-01 LPG tank car which appeared in March (RG 5.19 p23). With the design approved in January for use on railways across the Eurasian Customs Union, the first series of 400 vehicles is being built for Kazakhstan’s Texol. Each twin-tank vehicle will have a total load volume of 163.1 m3 and a payload of 90 tonnes, doubling the amount of LPG that can be carried.

Articulation is seen as a way to increase capacity within the train length limit of 994 m that has been standard across the ex-USSR countries for the past decade. While double-stack container trains are widespread in America, the concept has so far been rejected in Russia on the grounds of both safety margins and track loading characteristics (p40).

Articulated wagons are now gaining favour for all types of freight, particularly swap bodies, as they are expected to increase the maximum payload of a fulllength train from 6 300 to 9 000 tonnes without any specific investment in the infrastructure. As well as improving efficiency overall, this would support the government’s ambitious plan to increase coal transport volumes to 195 million tonnes a year. That would still require investment in motive power and the upgrading of traction substations, but using articulated wagons would avoid the need for remodelling tracks and stations over thousands of kilometres.

Of the ‘big three’ Russian wagon manufacturers, only Altayvagon has announced an articulated sliding-roof van, reporting orders for ‘a few hundred’. Yet UWC estimates the market potential for such a design as ‘hundreds of thousands’, pointing out that build quality and reliability are key.

UWC engineers have developed a family of articulated wagons, including advanced flat platforms with detachable bodies, which, in conjunction with the appropriate logistics, could reduce idling and empty running. According to the company’s First Deputy CEO for Strategy & Products, Alexey Sokolov, ‘these would cause a real shift in transporting technology’.

Market tightening

Production of the more traditional four-axle wagons seems set to slow down following the ‘rocket boost’ triggered by the government subsidies, and UWC is looking to long-term sustainable development. Daily leasing rates have been pegged at 2 000 roubles for a gondola or 1 800 for a van, down to around 1 000 for a petrol tank wagon, which reflects the dominance of bulk goods and export coal and ore in the Russian market.

Last year, Russian producers built 68 800 wagons of various types, an increase of 198% on the 2017 figure. The result was a national surplus of 74 500 vehicles within a pool of 11 million across the 1520 region. Around 20 000 stored vehicles ended up clogging nearly 300 track-km in holding yards, decreasing overall system velocity and forcing owners and lessors to offer discounts of up to 25% to get them moving again. While that helped to make rail more competitive with lorries for smaller forwarders using the spot market, UWC was impacted less as most of its customers are large companies with multiple product lines.

Export business

Given the limited opportunities for growth in the domestic market, UWC is looking to expand its export activities to account for at least 20% of its revenue, both to boost total income and to diversify its business further.

From the outset, the founders saw exports as a key part of the business, positioning the company as a global player and adopting advanced techniques and standards for wagon manufacturing in a very conservative rail sector. The company says this remains one of its key competitive features, along with its commitment to quality.

Export activities really took off in 2015, and have since been boosted by the devaluation of the rouble, which has almost halved against other main currencies. As well as nearby countries in the 1520 region, the company has targeted customers in Europe, North America, Africa and the Middle East.

Of the 38 800 wagons produced in 2017-18, around 1 100 were exported. These were mainly for CIS and Baltic countries, although 1 435 mm gauge vehicles were sent to Poland and Guinea. The export of bogie castings leapt from just 200 sets in 2017 to 1 700 in 2018.

With an eye to the revival of rail transport in South America, UWC has agreed a sales arrangement with the TMH regional representative. From the outset it has had its own representatives in larger markets like Europe and the USA, and has worked with local agents in emerging regions.

UWC regards CRRC as a strong global competitor which can also offer attractive prices. Although the Chinese are sometimes barred from tenders for lack of experience or quality concerns, strong government support makes them a forceful player. So UWC was pleased to win an order to supply 114 bauxite hopper cars for the Dian-Dian mine in Guinea, given that Africa is recognized as a target for Chinese expansion. These 54 m3/1015 tonne wagons were specially developed using AAR standards and 32.5 tonne bogies, and were designed to take account of high temperatures and humid operational conditions; they have now been in service for almost a year.

Pointing out that its products have been certified by both the AAR and DB, as well as ISO/TS 22163:017 (formerly IRIS), UWC expects to certify its entire manufacturing process in accordance with European TSI standards by the end of this year, allowing greater scope to export into the EU. Following last year’s success with the container wagons for DB, the company's engineers are working on more designs for European railways, capitalising on the growth in container and intermodal transport.

Reproduced from the June 2019 issue of Railway Gazette International by permission of the Editor. © Copyright DVV Media International Ltd