Russia: Since 2002, Transmashholding (TMH) has gone through the consolidation of disparate production sites to the standing as one of the technological leaders in the world rolling stock market. A phased analysis of the company’s development allows to trace the main events that determined such growth.
Reviving the industry
Initially, the unification of railway industry sites as a single holding company was seen as a forced decision. The first years of the 2000s were a difficult time for the Russian economy. The previous decade was memorable for the sharp decline in investment in basic infrastructure sectors, the constant crises of non-payment, the fall in industrial production. The bankruptcy of many enterprises led to the sharp decrease in demand for rolling stock. Even the prospects of the rolling stock maintenance were in question. Production and repair sites all over the country began to lose qualified personnel. Established supply chains were being destroyed.
Only the consolidation of enterprises, their financial recovery and the resumption of rolling stock deliveries orders could stop the final destruction of the industry. Such an understanding of the situation led the management of several industrial and transport companies to the idea to establish a new structure called Transmashholding. The new legal entity was registered on April 15, 2002, and since that day TMH has been counting its history. Bezhitsa Steel Foundry, Novocherkassk Electric Locomotive Plant (NEVZ), Bryansk and Demikhovo Machine-building Plants (BMZ and DMZ respectively), Tver Carriage Works (TVZ) and Penza Diesel Plant (Penzadieselmash) were the first production sites to become parts of TMH.
Visit to BMZ of the Ministry of Railways delegation, headed by First Deputy Minister Vladimir Yakunin. April 2003. Source: TMH
However, the creation of a new structure did not mean the instant start of a new prosperous stage in the life of legendary plants. After all, many of them were in critical condition. For example, at NEVZ, only EP1 passenger electric locomotives were mass-produced, while the production of freight locomotives ceased. BMZ retained its competencies in the shunting locomotives production, but its financial condition was very difficult. The perspectives of Penzadelmash, which supplied diesel engines for BMZ, remained unclear. Its closure would have led to a halt in production in Bryansk … The diligent, but at the same time, operational work was needed to revive the industry.
In a short time, the management of TMH, headed by young entrepreneurs Dmitry Komissarov and Mikhail Khromov, managed to convince key industry players – the Ministry of Railways, private owners of rolling stock, industrial companies – of ability to quickly restore the production of high-quality and efficient railway vehicles. The concluded contracts allowed TMH to raise the necessary funds and restore the activities of plants, and then form a long-term development strategy.
The signing of the first cooperation agreement between the Governor of the Bryansk Region Yuri Lodkin and Chairman of the TMH Board of Directors Dmitry Komissarov (right). April 2004 Source: TMH
The negative trend in Russian railway industry was reversed by the carried out work in 2004. The reform of the Ministry of Railways, as a result of which the management of the entire railway sector was transferred to the Russian Railways company (RZD), and the plans of the country’s leadership to upgrade the railway transport marked a new era in the life of the industry. TMH and RZD signed the first long-term cooperation agreement under the condition of creating new vehicles. That year, the holding allocated almost 3 bln RUR ($104 mln USD) for the investment programs implementation, which doubled the level of 2003.
The investment literally breathed new life into the plants. Working capital was replenished, the reconstruction of factories was started, rolling stock was developed that corresponded to the strategic tasks set for the industry. In total, in 2004, 55 EP1 passenger electric locomotives, 29 shunting locomotives, 547 passenger coaches and 690 freight cars were produced at the sites of TMH. In total, the holding increased sales of rolling stock to 22.4 bln RUR ($778 mln USD).
Increasing production and R&D activities
From the first years, TMH has set the standard: new railway vehicles must be unveiled every year. The retained competencies and design groundwork at each of the TMH production sites made it possible to promptly resume R&D. So, NEVZ immediately began work on creating a platform for a new generation of the ES5K AC and ES4K DC mainline freight electric locomotives. The first 2ES5K “Ermak” was already ready by the end of 2004 (today the number of ES5K locomotives is approaching the mark of 2,000 vehicles built). In turn, the 2ES4K “Donchak” prototype was built in 2006, by now more than 200 locomotives of this platform have been produced.
The first E5K mainline electric locomotive. Source: TMH
61-4440 passenger coach. Source: scaletrainsclub.com
Tver Carriage Works mastered the production of new coaches for the Nevsky Express train, which were designed for speeds up to 200 km/h. The plant also began work on a new series of passenger coaches with flat-corrugated bodies.
The formation of the TMH’s production sites network was completed mainly in 2005. It included one of the world’s largest manufacturers of metro cars Metrowagonmash (MWM), the Kolomna Plant, leading its history from 1826, the Oktyabrsky Electric Railway Car Repair Plant, which at first produced bogies and welded structures for DMZ, but later the production of metro cars and trams was mastered. The focus on consolidation, which was laid down during the creation of TMH, had an effect – the production sites complemented each other, and this could not but affect the pace of the development.
The intensity of R&D activities continued to grow. A new platform of 2TE25K “Peresvet” mainline freight diesel locomotives was unveiled at BMZ, and a little later, the first Russian 2TE25A “Vityaz” diesel locomotive with an asynchronous traction drive was presented, too. In Kolomna, a prototype of the EP2K passenger electric locomotive was produced, which came to replace the previously purchased Czech vehicles. The platform of TEP70 passenger locomotives was also seriously modified here: the new TEP70BS model received a more technologically advanced body, a microprocessor control and diagnostic system, and an electric heating system.
The result of the TMH’s three-year work was demonstrated at the Expo-1520 exhibition in Shcherbinka near Moscow. Among the many novelties, the new and comfortable RA2 diesel multiple unit, created at MWM, was shown. In further, it will serve as the basis for subsequent significant contracts for the supply of TMH diesel trains to Serbia.
By 2006, the creation of the main production sites framework, which secured TMH’s leadership in the rolling stock market, was completed. However, work was still required to form a unified corporate structure, which was supposed to provide synergy, increase the efficiency of the procurement system, and also improve interaction with partners – customers, banks, and potential investors.
Partnership of the strongest
The expectations of rolling stock customers had continued to be high: they demanded a quick technological breakthrough from TMH. It was clear that it could only be achieved through partnership with global players, which would provide access to ready-made technologies in exchange for entering the Russian market. The same approach should serve as the foundation for growing at the global market.
ED4MKM-AERO electric train. Source: aletvinn, вжд.рф
In 2007, RZD became a shareholder of TMH and that way showed confidence in the company in order to help attract a foreign partner. Negotiations took a long time, the largest players in the railway industry were considered. The choice was officially announced in October 2008: TMH signed a memorandum of understanding on strategic partnership with Alstom, which received the opportunity to acquire 25% + 1 shares of TMH.
Together with Alstom, three joint ventures were created – TRTrans (an engineering center for the development of new vehicles), RailComp (an enterprise for the localization of the high-tech components production) and TramRus (an enterprise for the tram technologies development). However, the main thing was not noticeable to a wide audience – with the support of Alstom, TMH began implementing the lean production concept and creating its own production system, which, according to over the years, has led the company to a significant increase in efficiency. Introduced methods and tools helped TMH improve working conditions, reduce spending and optimize production at production sites. Thus, in 2018, 10 largest TMH plants switched to the ISO/TS 22163 quality management system standard used by all the world’s leading rolling stock manufacturers.
The most important milestone of cooperation with Alstom was the creation of an innovative passenger bi-mode electric locomotive EP20. In 2010, a contract was signed with RZD for the deliveries of such vehicles. A year later, a unique new locomotive was presented at 1520 Expo, and later it brought the Olympic flame to Sochi.
Another important project of TMH and Alstom was the establishing of a locomotive assembly plant in Kazakhstan. Such cooperation allowed TMH to achieve significant progress both in terms of technology and business processes, creating the basis for further independent work of the company.
Modern production of rolling stock at BMZ. Source: TMH
Entering the record books
By the end of the 2000s, the entire network of plants within TMH was finally established. It also included Transmash, a freight cars and track machines producer. The streamlining of R&D activities began: the All-Russian Research and Development Institute on Electric Locomotives Building (VELNII) also joined TMH, for a long time constituting a single scientific and production complex with NEVZ. Based on the experience of this interaction, TMH will later create a separate company for the development of new technical solutions – TMH Engineering, which will include R&D teams of the TMH’s production sites.
In 2008, the complex production upgrading program was completed at TVZ. The implementation of modern equipment and robots made it possible to create one of the most modern production facilities in the world with a record capacity even by world standards – 1,200 coaches and bodies per year! For this, TMH invested 5.4 bln RUR ($217 mln USD) in the plant. The Tver production site, which in 1905 created the world’s first double-decker passenger coaches, in 2011 began mass production of new ultra-modern “double-deckers”, which almost immediately began to change the image of rail travel in Russia.
Robotised area for welds testing at TVZ. Source: TMH
In 2011, TMH’s revenue overcame the level of 100 bln RUR ($3.4 bln USD). That year, the company produced 413 sections of mainline electric locomotives, 152 sections of mainline diesel locomotives, 126 shunting diesel locomotives, 656 passenger coaches, almost 550 cars of electric and diesel multiple units, 343 metro cars, as well as a record 4.6 thousand freight cars.
Other areas have also been under development. DMZ constructed Russia’s first ED4MKM-AERO EMU for intermodal communication, for which, first time in the national practice, baggage cars were designed and built. In 2015, Moscow, the Moscow Region, the country’s largest suburban operator Central Exurban Passenger Company (CEPC) and the Moscow and Tver Suburban Passenger Company (MT PPK) signed a 15-year agreement for transport services in the Russian capital agglomeration area. As part of the contracts for the rolling stock renewal, DMZ began to mass-produce new energy-efficient EP2D EMUs with an increased level of comfort and the ability to vary the train composition from 2 to 12 cars.
Since 2014, TVZ has also started to produce the multiple units: the company presented a completely new platform of EG2Tv “Ivolga” EMUs. In the same year, a 100% low-floor tram at the facilities of TVZ was produced by the TMH’s partner, the PC Transport Systems company, which has since become the largest trams manufacturer in Russia.
81-775/776/777 “Moscow-2020” metro train. Source: TMH
In 2014, TMH achieved success with the one of the world’s largest orders for the metro trains delivery: Moscow signed a life cycle contract with the company for the supply and maintenance of more than 800 metro cars for 30 years. Under the contract requirements, a new platform of 81-765/766/767 “Moscow” metro trains of was unveiled, the modernity and comfort of which were immediately appreciated by the citizens of the Russian capital.
In turn, the 2TE25A diesel locomotive, produced by BMZ, for the first time hauled a train weighing 7,500 t at the eastern part of the RZD’s network, so-called Eastern Polygon that is key for Russian exports to Asia-Pacific Region. This result significantly exceeded the capabilities of serial locomotives in operation and became an impetus for further increasing of the traction rolling stock traction power. So, in 2014, a modification of the 2TE25KM diesel locomotive was presented, equipped with a more powerful 18-9DG diesel generator and continued in the 3TE25KM and 3TE25K2M models, capable of hauling even heavier trains in the difficult terrain.
2TE25AM mainline diesel locomotive by TMH. Source: Alexey Stepanovich, railtrain.pr
Same year, a four-section 4ES5K electric locomotive was produced by NEVZ. With a power of 13,120 kW, for several years it held the title of the most powerful electric locomotive in the world. More than 40 such locomotives have been delivered to customers.
Another important event of those years was the creation of TMH’s own locomotive service system. In recent years, all locomotives have been purchased by RZD under life cycle contracts: a significant proportion of both new and already operated vehicles is served by 90 service depots and repaired by 9 plants of the LocoTech service company, which is part of the TMH group.
Adapting to be a leader
Having passed such a way and, in many respects, fixing its leadership in the Russian rolling stock market, TMH did not stop there. In 2015, a new strategy was adopted by the company, which included a transition to new principles for creating products and increased activities at the global marker. In order to achieve the set targets, Kirill Lipa was appointed CEO of TMH, and is currently managing the company.
61-4492 double decker passenger coach by TMH. Source: TMH
“We are striving to be a national industrial partner,” said Kirill Lipa in an interview with the Railway Equipment Journal in August 2019. TMH began to work actively around the world: divisions were opened on almost every continent, and long-term cooperation opportunities were offered to customers. The result is in contracts: the modernization of more than 200 metro cars for Budapest in Hungary, the revival of a depot for the repair of 24 diesel locomotives and 160 passenger cars in Argentina, as well as many other deliveries that provide increased prosperity and jobs in each partner country. The major for TMH was a multilateral contract for the supply of 1,300 passenger coaches of various models for the Egyptian National Railways over 5 years.
In 2018, TMH’s revenue exceeds 200 bln RUR ($3.2 bln USD). The digital transformation program is launched at the company’s production sites. It includes more than 40 initiatives that must be comprehensively integrated at all stages of the product life cycle: from the design of new equipment to its maintenance. Together with the key customer, RZD, the project for the Trusted Environment of the Locomotive Complex is being implemented, designed to provide a new level of transparency and efficiency of interaction.
Modern production of MWM. Source TMH
Each year is marked by a significant order for TMH and in the domestic market. Thus, in 2019, a long-term contract was signed with the Federal Passenger Company (part of RZD) for the deliveries of 3.7 thsd passenger coaches. It includes the development of a line of new generation passenger cars. In 2020, a contract is signed for the supply of 1,360 cars of a completely new Moscow-2020 train for the Moscow metro: in many respects superior to world analogues, with the ability to integrate the fully driverless GoA4 ATO level (supplier is a partner company, TMH Intelligent Systems), much cheaper than solutions from other players in the global market. In 2021, TMH wins the tender for the supply of 95 EMUs in 11-12-car configurations for new lines of the Moscow Central Diameters urban railway system and its maintenance throughout the entire life cycle. The EGE2Tv “Ivolga 3.0” electric train with an acceleration rate of 1 m/s2 was created to meet the customer’s expectations.
The upgrading of production does not stop, too: the TMH’s investments in 2015-2021 in the production complex reach almost 60 bln RUR ($0.9 bln USD). Under these investments, 64 precision production lines are organized at TMH sites. At the site of Bezhitsa Steel Foundry, a project is being implemented to create a center of excellence for metallurgy and machining of castings with an investment of 5 bln RUR ($77 mln USD, as of 2019). Significant funding is directed to the development of the Kolomna Plant and Penzadieselmash for mastering the production of a new generation of diesel and LNG engines. With the participation of TVZ, the small series coach production is being revived at the site of the former Torzhok Car-Building Plant.
EG2ETv “Ivolga 3.0” electric train by TMH on trials. Author: Igor Lagutin
More than 7 bln RUR ($108 mln USD) are allocated for R&D in 2016-2020. At a different level of scale, work is taking place at TMH Engineering, which is implementing more than 100 projects in Russia and abroad. TMH is increasingly investing in the technological future of the country: the 2050.LAB National Center for Industrial Design and Innovation is opened, jointly with the Skolkovo Foundation the TMH: New Vision acceleration program is launched.
Creating the future of rail
As to SCI Verkehr, TMH is ranked 4th in the world for the new rolling stock deliveries in 2019, and, taking into account the merger of Alstom and Bombardier, it ranks 3rd. In 2020, TMH’s revenue exceeds 300 bln RUR ($4.2 bln USD), more than 60 rail vehicles and components have been certified. Thus, a new generation of mainline electric locomotives, 2ES5S and 3ES5S, with the first Russian DTA-1100 asynchronous electric motor, which was also developed by TMH, is receiving a permit for operation. In 2021, a new record is set – TMH’s revenue reaches 312 bln RUR, and more than 1,000 locomotive sections, more than 1,000 passenger coaches, 370 cars of multiple units, and more than 400 metro cars were built in a year.
This June, TMH has obtained a high ESG rating from the Expert RA agency that means a very high level of TMH’s respect for sustainable development interests when making key decisions. The Expert RA agency states that TMH in 2021 compared to 2018 reduced CO2 emissions by almost 6%. More than 100,000 people work within the TMH group, including LocoTech and Ctrl2GO, and more than 6 thsd companies supply raw materials, semi-finished products and components for the holding. Throughout the 20 years, TMH’s investments in the development have exceeded 90 bln RUR ($2.1 bln USD).
TMH has developed and implemented brand-DNA, which endows rolling stock with similar features, and new rail vehicles actively receive international design awards. Brand-DNA not only emphasizes the key message “It’s made by TMH”, but also makes the Russian brand recognizable in the world. A unique look, work on promising technologies, including hybrid and hydrogen engines, unmanned vehicles and digital factories – all these lay the foundation for the further development of TMH.
New design of the modern TMH’s locomotives. Source: TMH