Closed Joint Stock Company "Stadler Minsk" is a leading Belarusian rolling stock manufacturing enterprise. The company is a part of Stadler Rail Group, which is well-known worldwide. Stadler Minsk CJSC has been operating in Fanipol, Minsk Region, for less than 10 years, but it has proven to be a successful manufacturer of a wide range of products in the field of city and rail transport both for the domestic market and for export. Since 2014, the company produces and supplies rolling stock to the CIS, European countries, Latin America. The Stadler Minsk team consists of more than 1550 highly professional employees, and each of them makes an individual contribution to the creation of high-quality and secure transport. Philipp Brunner, CEO of Stadler Minsk CJSC talks about the company development, export strategy and further plans.
Stadler Minsk CJSC establishment is the result of the implementation of the Stadler Swiss company investment project. Can you please briefly describe how this project was implemented? What achievements are you most proud of?
Stadler became associated with Belarus nine years ago, when our first trains appeared here in 2011. In 2012, there were negotiations on the establishment of a Swiss manufacturer's subsidiary in Belarus. Construction of the new plant began in January 2013, and by next May we started the production of the first KISS double-deck train for the Russian operator Aeroexpress. From the beginning of the production process until present we have managed to organise a full production cycle and a high level of localisation: mechanical treatment, welding of elements and bodies made of aluminium or, in case of tram cars, made of steel, painting, assembly, static and dynamic commissioning of rolling stock. I should mention that it all started from scratch, with an empty green field. If at first our production capacity allowed us to produce up to 150 car bodies per year, today it is already 400 car bodies, and according to the 2021 plan, it will expand up to 500 per year. The production development has logically led to our staff increase. More than 1550 highly professional specialists work at Stadler Minsk. In Belarus, we do not only manufacture, but also develop our products: the METELITSA tram, the METRO for Minsk, the electric train FLIRT EPMII for Belarus, as well as four types of future trains for Azerbaijan – all were designed by our Belarusian engineers.
I am most proud of the fact that Stadler Minsk has become the largest manufacturing company outside of Switzerland in the Stadler Group in the short time from 2014 to 2020. Our team successfully managed this development despite the difficult times in 2015–2016 as well as 2020. Today, we can proudly say that we deliver quality and efficiency that is a standard for a Stadler factory.
What is the range of products manufactured today? Are there any peculiarities, characteristics, or specialization of Stadler Minsk machinery compared to other Stadler plants?
Our plant manufactures FLIRT single-deck electric and diesel-electric trains, KISS double-deck trains, METELITSA trams, METRO trains, sleeping cars, as well as components for enterprises within the Stadler Group. From the very beginning, it was determined that Stadler Minsk would manufacture and supply rolling stock for the broad-gauge CIS countries. Today, we manufacture just as many vehicles for Western countries as for the CIS but our competence in engineering and certification is focused on post-soviet countries. This is the main distinction of Stadler Minsk from other Stadler companies.
Swiss quality is a solid argument. At the same time, the competition in the engineering industry both in Belarus and abroad is very high. Nevertheless, according to the results of last year, your company decisively won the "Best Exporter of the Year" contest. What is the export strategy of the company? How do you enter new markets? Which of them are the most attractive for now and in the future?
Today, we have many projects in process, and most of them are for Western European countries. According to approximate figures, this is about 70 percent. Though it is not our strategy to increase supplies in this direction, since the Stadler Group has companies operating in these markets. We are focused primarily on the CIS. In 2021, the situation will change, as we have several large orders for the Commonwealth countries. For example, in the nearest future, we will start the production of FLIRT single-deck trains for the Azerbaijan Railways – these are four interregional trains with a diesel-electric motor unit, three interregional, and three regional electrical trains. In the meantime, the work of engineers, imperceptible to many, is being performed, materials and components are being purchased. Further, we expect new opportunities to open up in the markets of Russia and Georgia, where we already have a good reputation, in the Baltic States and Central Asia.
Foreign markets development is surely important for any company. However, Stadler Minsk trains are actively running in Belarus, including underground (Minsk subway). What projects are being implemented and planned to be implemented in our country?
In 2010, the order for FLIRT single-deck trains for the Belarusian Railways became an important milestone and is one reason why we chose Belarus from all countries in the Eurasian Economic Union to establish a production facility. In a small country like Belarus, we do not have that many clients, but we try to effectively interact with each of them. In January 2019, we signed a new contract with the Belarusian Railways for the purchase of 10 five-car electric trains FLIRT for business-class interregional lines. They are going to look very similar to those that are currently involved in the Minsk – Gomel route, but even more convenient, since the Belarusian Railways tried to take into account all the comments and suggestions of the passengers. For example, the passenger seats will become more comfortable for long trips. Currently, this order is in process, and the first train is already being tested. After passing all the necessary certification procedures and trial operation, the first train is planned to be handed over to the customer at the end of this summer.
Last year, our subway trains started operating with passengers on the new third line of the Minsk subway, which we are very proud of. We do expect that after the first batch of subway trains supply, our cooperation with the Minsk subway will continue. Firstly, we provide warranty and post-warranty service for our rolling stock. Secondly, the subway train fleet is ageing and needs updating. If the subway announces another tender, we will definitely take part in it and try to offer the most favourable commercial terms.
We have no completed joint projects with Minsktrans yet. Last year, our METELITSA tram was in trial operation for several months in Minsk, which allowed us to get feedback to improve the characteristics of our trams specifically for the infrastructure of Minsk, but there are no specific orders yet. We certainly hope that the demand for modern rolling stock and urban electric transport will increase, and we will have more orders for Belarus.
What is your impression of Belarus and working here? What attracted you, surprised you, or maybe disappointed you the most? What advice would you give to a foreign business considering investing in Belarus?
The Swiss and Belarusians have a similar production culture. The Belarusians are disciplined and know how to work. People are well educated and I am often impressed by the high level of competence. In my opinion, the most attractive thing about Belarusian investment environment is the labour market. It allowed us to create production capacity with high efficiency and great quality within a short time. This is my personal experience compared to other countries where I have supported or executed investment projects over the last ten years at Stadler.
Belarus still has potential to improve the business environment compared to other countries. Among other things, it is necessary to simplify and reduce the number of requirements related to customs, logistics, warehouse, inventory, staff structure, accounting, and statistical reporting. Today, these requirements lead to the fact that, for instance, due to the complex customs documentation required for supplies from Europe, many European companies are initially not ready to work with us. Due to such reasons, the final product can be more expensive than the one we produce in Central Europe, which makes us less competitive. We speak openly about this potential for improvement with governmental organs, and we see improvements. The initiatives from the state, which are discussed and adopted during investment forums, meetings at the Belarusian Chamber of Commerce and Industry, as well as during business councils of different countries bring constant progress and have improved the business environment over the period of our investment project. We hope that such initiatives will continue in the future and that the working environment for us and other foreign investors will further improve.
At the same time, there have also been certain changes in labour law and new requirements regarding unions that are a set-back for the business environment. Despite that, we are satisfied with the conditions provided all together and have therefore decided to continue investments in Belarus also for 2021.
My advice to a potential investor is to team-up with people that already have experience in Belarus. Find a partner to join you or involve competent, trust-worthy staff from the very beginning.
We cannot help but ask what difficulties you had to face during the pandemic? How was interaction with the investor and foreign partners carried out in such a situation?
For now, it is hard to assess the future impact of the pandemic on our company. We can say that Stadler did not experience a loss in demand, as it happened in other industries. The Stadler Group has a large number of multi-year orders. Nevertheless, we had difficulties in other areas: in working with suppliers and contractors who did not supply components or start up the equipment required for production on time. Border closures and travel restrictions for our customers and employees have resulted and continue to result in delays in commissioning our vehicles, permission for the operation, and acceptance of our products. Despite the mentioned limitations and impacts, Stadler Minsk always continued production, and we were able to fulfil all contractual obligations to our customers in 2020. This ended in a good result for the year: we made more than two million production hours, produced 320 Aluminium car bodies, and hired more than 200 new employees. We increased production and storage areas, and put our new factory for power converters into operation. Therefore, despite all the challenges of 2020, we can say that it was a successful year for Stadler Minsk.
What are the plans and forecasts for the enterprise development for 2021?
We will continue to increase our production capacity on Aluminium car bodies by 25 percent and produce 450 car bodies. By the end of the year, our capacity will have reached more than 500 per year. Painting and welding production will be expanded, and the planned production hours will surpass 2.2 million. We plan to optimize the already implemented new business processes and therefore use space, production equipment and personnel resources more efficiently.
We will continue the production of trains for Hungary, Slovenia, Norway, Belarus, Azerbaijan, and car bodies for Spain, Poland, Germany, and the United States. Our personnel will have increased to around 1700 employees until the end of 2021, and we will continue to educate our staff in all areas.
I am convinced that this year will be the best year yet for Stadler Minsk.
Subscribe to news
