ITOCHU and China's CSR Sifang Accept Order for Guangzhou Linear Metro Cars

April 26, 2010

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; President & CEO: Masahiro Okafuji; “ITOCHU”) has accepted an order from the Guangzhou Metro Corporation (headquartered in Guangzhou, Guangdong Province; “Guangzhou Metro”) to deliver 196 linear induction motor cars for the No. 6 subway line in collaboration with CSR Qingdao Sifang Locomotive and Rolling Stock Corporation Limited (headquartered in Qingdao, Shandong Province; “CSR Sifang”), an affiliate of China South Locomotive & Rolling Stock Corporation Limited(headquartered in Beijing; “CSR”), which is the largest manufacturer of railway rolling stock in China. The total value of the contract is approximately 23 billion yen and both companies will be jointly managing the project to deliver the rolling stock. Under the present arrangement, ITOCHU is responsible for supplying electrical components, bogies, brakes and other key components of the linear induction motor cars from overseas manufacturers with CSR Sifang collecting technical particulars, procuring domestic components in China and manufacturing the rolling stock.

In 2004, ITOCHU and CSR Sifang among others accepted an order for the first 300 linear induction motor cars in China for the No. 4 and No. 5 lines on the Guangzhou Metro, with the present order expected to bring the total to 496 cars. Delivery of rolling stock for the No. 4 line on the Guangzhou Metro started from 2005 with the line running from north to south in Guangzhou city in 2005. Both the No. 4 line, which connects to the Olympic Stadium for the Asian Games (planned for November 2010), and the No. 5 line, which opened in December 2009 and runs from east to west in Guangzhou City, are principal means of transportation for Guangzhou residents. The trains have been operating smoothly, contributing greatly to alleviating traffic congestion in Guangzhou city, which had been a bottleneck.
With respect to rolling stock for the No. 6 line expected to start operating in December 2012, there have been a range of discussions on the basis of the opinions of the residents of Guangzhou as well as the Guangzhou Metro, but the actual results of safely operating the No. 4 and No. 5 lines and the steady implementation of the project have earned acclaim, which links in with the present order.

At present, Guangzhou has a population of approximately 10 million with five lines operating on the Guangzhou Metro as of 2010. There are plans to build a subway network of 16 lines covering a distance of at least 600 km by 2020 with procurement of linear subways expected. Guangzhou is also the largest city in the South China area, and with construction of an urban transportation network in the Pearl River Delta, focused on Guangzhou and Guangdong province, now underway, the urban transportation and subway network is expected to reach a total of 2,000 km in the future.
Highly acclaimed as ideal for the traffic system in heavily populated Guangzhou, the linear induction motor car manufactured by ITOCHU and CSR Sifang is also suitable for medium- quantity to mass transportation in China, and we will be aiming for more orders in the future.

ITOCHU has positioned China as one of its principal markets, and it is undertaking projects in the railway sector after concluding a strategic collaborative alliance with CSR in 2005. To date, ITOCHU has received orders for the No. 4 and No. 5 lines on the Guangzhou Metro and has established a joint venture for railway rolling stock design. ITOCHU is now pursuing technical cooperation encompassing the industrial machinery derived from the railways. Looking forward, ITOCHU is seeking to develop collaborative alliances focused on urban transportation and export.

Summary of the Guangzhou Metro No. 6 line

Contract coverage Delivery of 196 linear induction motor cars for a subway
Contract value Approx. 23.1 billion yen
Contract parties ITOCHU, CSR Sifang consortium
Planned operation Operation is expected to start in December 2012
Total distance 42 km in total (32 stations)

About CSR Qingdao Sifang Locomotive and Rolling Stock Corporation Limited

The largest plant for manufacturing railway rolling stock in China. Introduced Japanese technology in 2004 to manufacture a Chinese version of the bullet train, which is currently in operation. The business is focused on high-speed rolling stock and urban transportation.

Corporate name CSR Qingdao Sifang Locomotive and Rolling Stock Corporation Limited
Representative Jing Jiang, Chairman
Head office No.88, Jinhong East Road, Chenyang District, Qingdao City, Shandong
Established 1900
Capital RMB 3.3 billion
Employees 6,500
Net sales RMB 10.1 billion (2009)
URL[Open in a new window] (CSR website)