Kronospan buys timber platforms made by TikhvinSpetsMash

Research and Production Corporation “United Wagon Company” (“RPC UWC” or the “Company”) (MOEX: UWGN) has signed a contract with Kronospan, the world’s leading producer of chipboard, to supply 267 platforms for timber transportation. The deliveries will be made by the end of 2017.

A first batch of model 13-6852-02 timber platforms made by the TikhvinSpetsMash (part of RPC UWC) has already been shipped to Kronospan. The platforms offer competitive advantages thanks to increased loading volume of 122 m3 and carrying capacity of 74 tons, which enable more efficient transportation of both light and heavy types of wood. These advantages mean that the owner can significantly reduce transportation cost and make savings on fleet maintenance.

RPC UWC designers have worked with timber transportation companies to design a timber platform that compares favourably with analogues already present on the market.

Run time of 800,000 km or eight years between scheduled maintenance is a major competitive advantage of the new platform, reducing servicing costs throughout its 40-year lifetime. The design of the platform was finalized by the All-Union Research and Development Centre for Transportation Technology (part of PRC UWC).

Commenting on the deal with RPC UWC, the CEO of Kronospan in Russia, Ardasher Kurbansho said:

"Our company has worked successfully on the market for more than 120 years, and its products are well known all over the world. Experience and constant commitment to innovation mean that we employ know-how, not just to create new generation products for our customers, but also to provide services for their delivery. By saving time on loading and unloading, and by increasing the safety and reliability of transport we significantly reduce logistics costs. The solutions offered by our partner PRC UWC are up-to-date, professional and meet the high standards, which we require."

Market experts estimate the Russian fleet of specialized timber platforms at about 20,000 freight cars and the fleet is growing rapidly: about 5,000 freight cars have been manufactured in the last three years, against just 1,500 which have been decommissioned. Demand for platforms has grown as timber transportation volumes have recovered. Volumes grew by 5.5-6% annually in 2014-2016, mainly due to exports to China. Demand will also be driven by further disposal of obsolete fleet, which is already beyond its statutory service life. About 1,500 freight cars have been written off this year, and average write-offs per year over the next decade will be about 1,000 freight cars.