Kryukiv Wagon to increase cooperation with Belarusian Homel

According to Kommersant-Ukraine, Belarusian Homel Wagon Repair Plant plans to increase its purchases of passenger railcars from Kryukiv Wagon (KVBZ: BUY) in 2009 from 20 to 25-30 units. Belarusian Railways demands ~400 new wagons over the next five years, and ~125 wagons are scheduled to be produced by Homel from imported components. Homel and Kryukiv Wagon started cooperating in April 2008, after Homel’s main supplier, Tver Wagon (Russia), limited its supplies of spare parts due to high demand on the Russian market. Kommersant said Homel and Kryukiv Wagon are considering a merger. According to representatives of Homel, its privatization is highly likely in 2009. Inna Perepelytsya: We estimate cooperation with Homel Wagon Repair Plant would bring Kryukiv Wagon additional sales of USD 45-50 mln over five years. The company’s merger/acquisition plans are in line with its strategy to strengthen position on the CIS markets.