Kryukiv Wagon targets passenger segment as demand for freight wagons fades

Kryukiv Wagon (KVBZ UK), Ukraine’s only producer of both freight and passenger railcars, plans to increase the share of passenger segment in its revenues by almost 5x to 50% within the next 4-5 years, the chairman of the company’s supervisory board said yesterday (via Interfax). He also noted that the concentration on the higher value added passenger segment will allow the company to maintain its profitability as CIS demand for freight wagons is expected to fade.

Roman Dmytrenko: The most recent production data from Kryukiv’s main Ukrainian rivals, Dniprovahonmash (DNVM UK) and Stakhaniv Wagon (SVGZ UK), indicate that demand for most common freight wagon – gondolas – is already cooling. At the same time, recently launched modernization programs for passenger wagons and trains by state railway monopoly Ukrzalyznytsa and the Kyiv city subway system creates an opportunity for Kryukiv to reduce its exposure to the overheated CIS freight railcar market and load its production facilities for the next couple of years.