Business

New JR East firm to look abroad

Bloomberg

East Japan Railway Co., the world’s largest listed train operator, plans to form a company this year to help coordinate domestic rail suppliers’ attempts to challenge Alstom SA and Siemens AG for rail projects overseas.

“We’re setting our sights on the world,” Masaki Ogata, JR East’s vice chairman for overseas affairs, said in an interview in Tokyo on Thursday. “The organization will pull together all of Japan’s railway businesses.”

JR East aims to begin full operations of the company next year, offering packages for overseas projects that include trains, operations, signals and other parts, Ogata said. Japanese rail companies have supplied high-speed trains to Taiwan and the U.K., while companies from other countries built the infrastructure.

The planned company will be similar to Paris-based Systra, Ogata said. The French company, part-owned by rail operators Societe Nationale des Chemins de Fer Francais and Regie Autonome des Transports Parisiens, had sales of more than €250 million ($356 million) last year and has helped local suppliers, including Alstom, win projects in more than 150 countries since its formation in 1957.

JR East shares have dropped 15 percent this year, compared with a 12 percent decline in the Nikkei 225 stock average.

JR East has already allied with Kawasaki Heavy Industries Ltd. and other domestic companies to bid for parts of a California high-speed rail project estimated to cost more than $40 billion. The nation’s rail companies are targeting overseas sales as a shrinking population stymies growth at home.