Hyundai Rotem Secures Record Backlog in Rail Sector, Eyes Global Expansion

SEOUL, Aug. 21 (Korea Bizwire) – Hyundai Rotem, a leading South Korean railway equipment manufacturer, has reported a record-breaking order backlog in its rail division, securing approximately eight years of work ahead.

The company is now setting its sights on additional high-speed rail contracts while reinforcing its production facilities to ensure timely deliveries. 

As of the first half of this year, Hyundai Rotem’s backlog in the rail sector stands at 13.3 trillion won, marking a 17% increase from the end of last year.

Based on last year’s rail division revenue of 1.55 trillion won, this backlog represents over eight years of future sales. The rail sector’s order backlog is about 2.7 times that of the company’s defense division.

Hyundai Rotem has been on a winning streak both domestically and internationally.

Overseas, the company secured contracts for the Kaohsiung Red Line EMU project in Taiwan, the Queensland EMU supply project in Australia, and the Sydney double-deck EMU refurbishment project.

On the home front, it won bids for the KORAIL EMU-320 mass production project, the Dongbuk Line urban railway project, the Samsung-Dongtan GTX project, and the Capital Region Express Railway (GTX) Line C project.

This year, Hyundai Rotem has continued its global expansion with significant international orders, including the Los Angeles EMU supply project, the Egypt tram project, and additional orders for Boston bi-level coaches.

In June, the company marked its first high-speed rail export with a 270 billion won contract from Uzbekistan Railways for the supply and maintenance of distributed power high-speed vehicles. 

The company is now eyeing additional high-speed rail orders in Morocco, with CEO Lee Yong-bae personally leading sales efforts in the country. Hyundai Rotem has submitted a Request for Information (RFI) to Moroccan authorities and is awaiting selection as a preferred bidder.

The Moroccan side is reportedly seeking technology transfer and the establishment of a local manufacturing plant as conditions for the deal. 

To meet growing demand, Hyundai Rotem’s rail car factory utilization rate reached 102.4% in the first half of this year.

The company plans to invest about 100 billion won over the next three years to upgrade its Changwon rail car factory, with 27.2 billion won earmarked for this year, 34 billion won for 2025, and 36 billion won for 2026.

Jeong Dong-ho, an analyst at Mirae Asset Securities, estimates the Morocco high-speed rail project to be worth over 2 trillion won, involving the supply of 168 rail cars.

He anticipates the announcement of a preferred bidder in October, with a contract potentially being signed next year.

Kevin Lee (kevinlee@koreabizwire.com)