October 13, 2004
French industrial conglomerate Alstom has clinched a package of power and transportation deals worth more than 1.4 billion euros (US$1.68 billion) in the past four days during the visit to China of French President Jacques Chirac.
An Alstom consortium was yesterday awarded a 134 million euro (US$160 million) contract to supply Metropolis trains for the extension of Shanghai's metro line 1.
The consortium, in which Alstom holds one third of the shares, will supply altogether 16 trainsets.
The French company yesterday also signed an agreement to transfer wet flue gas desulfurization technology to Harbin Power Equipment Company. The technology is used to reduce the emission of sulfur dioxide from power plants.
The two contracts came three days after Alstom netted several contracts, worth a combined 1.36 billion euros (US$1.63 billion), to deliver trains, locomotives, hydroelectric turbines and pumping equipment to the Chinese market.
Alstom clinched more than one third of the US$5 billion in deals done between French and Chinese companies during the presidential visit.
"This week has been fruitful for our company," said Alstom Chairman and CEO Patrick Kron yesterday during a press conference.
"It is a significant change of step for Alstom's position in China."
The company had earlier set its revenue target at 1 billion euros (US$1.2 billion) till 2005, but the deals in the past a few days alone have beaten the target.
Focusing on its core business of power and transportation, Alstom's revenue in China increased from 300 million euros (US$360 million) in 2002 to 600 million euros (US$720 million) last year.
"Now, we can move faster forwards," said Kron.
Kron yesterday said its business mode is a tri-win situation as all the contracts involve technology transfer and the increase of localization that benefits partners and customers.
Satisfied with the lucrative contracts, Alstom is now looking forward to a successful long-term presence in China. One of the key projects Alstom is looking at is the multi-billion-dollar Beijing-Shanghai high-speed train which has been suspended by the Chinese Government.
Kron yesterday said Saturday's deal to deliver and build 60 trains of 200-250 kilometres per hour places the French company in a favourable position in the race for the contract.
"The deals build a platform for us to participate in the 300-350 kilometres per hour high speed train when it is launched," said Kron.
Philippe Mellier, president of the Transportation division of Alstom, said the recent contracts are very important because they allow Alstom to build up experience and relations with Changchun Railway Company in the long-term.
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