​Transmashholding enters South Africa’s rail sector with a R500-million investment

Sam Bhembe, director, Mjisa Investments; Martin Vaujour, chief executive of TMH International; and Jerome Boyet, chief executive of TMH Africa.

Sam Bhembe, director, Mjisa Investments; Martin Vaujour, chief executive of TMH International; and Jerome Boyet, chief executive of TMH Africa.

Transmashholding (TMH), the largest rail rolling stock manufacturer in Russia today, has announced a R500-million investment into South Africa through a newly acquired subsidiary, TMH Africa.

TMH has an annual turnover of €2-billion, a workforce of over 40 000 employees and 13 production sites in Russia.

This investment forms part of the company’s growth strategy for international markets aimed at investing R50-billion in six countries — Argentina, Cuba, Egypt, Iran, Kazakhstan, and South Africa — over the next five years.

The R500-million invested into TMH Africa will go towards the acquisition of DCD Rolling Stock, a company with a 107-year history as a supplier of locomotives, wagons and related products. TMH Africa will also upgrade and develop the 45 000 square metre manufacturing facility formerly owned by DCD, which will be used to assemble, manufacture and service locomotives and other rolling stock for the continent.

TMH Africa is 70% owned by TMH International and 30% owned by Mjisa Investments, a Black Economic Empowerment partner. The company will position itself as a local manufacturing partner for global original equipment manufacturers, while also developing its own capacity with sub-assembly manufacturing and service. It will manufacture diesel locomotives and coaches for South Africa and the African continent and provide servicing, refurbishment and sub-assembly.

On why TMH has decided to invest in South Africa, Jerome Boyet, chief executive for TMH Africa, says:“South Africa continues to be an attractive investment market because it is very stable and has a huge potential to grow into a big African and global market of choice. South Africa is a practical gateway into Africa for any business that wants to service the continent. Plus, its rail sector has the largest railway network, the required skills set and suppliers to support manufacturing and related activity. South Africa is also part of the Brics (Brazil, Russia, India, China and South Africa) countries, which our parent company belongs to.”

Boyet further shared that TMH’s go-to market strategy for international markets is underpinned by the importance of partnerships and taking a long-term approach to investing.

“TMH International acts as an industrial investor to create local champions and this approach has yielded win-win results for us in other markets such as Cuba and Kazakhstan. We will do the same for South Africa, and together with our local partners, we will ensure that our business strategy is in alignment with the South African National Development Plan’s priorities for our sector. These include increasing job creation, making South Africa a manufacturing hub and increasing skills development.”