Hyundai Rotem breaks ground on Brazil plant

Kim Seung-tack, fifth from left, Hyundai Rotem’s CEO, sits with other senior officials during a groundbreaking ceremony for the company’s train manufacturing plant in Araraquara, Brazil, Thursday (local time). The plant to be completed in March next year will be the company’s third overseas production facility. / Yonhap

By Park Jin-hai

Hyundai Rotem, a unit of Hyundai Motor Group, broke ground on a plant in Brazil on Thursday, expanding its railway business to Latin America.

It will invest 42 billion won in the plant in Araraquara, 280 kilometers from San Paulo, to complete construction by March 2016.

The factory, its third overseas plant after the U.S. and Turkey, will be able to produce 150 trains a year. The company expects total production from the three plants to top 400 trains per year.

The new plant will put the company in a good position to bid for public projects because it will meet Brazil’s public procurement act that requires 60 percent of a contract to be either made or purchased locally.

Brazil is expected to open bids to build subways in and around the capital worth 2.5 trillion won by 2020.

Hyundai Rotem will seek more business opportunities in other Latin American nations including Peru, Chile and Colombia.

“Brazil is a massive market that we need to focus on as much as we do for the U.S., China and India,” said Hyundai Rotem CEO Kim Seung-tack during the groundbreaking ceremony.

“The Brazil plant will take an important role in lifting our company’s global competitiveness and serve as the forefront of our Latin American business as well.”

Hyundai Rotem has been supplying rail cars to Brazil since November 2003, when it first supplied 24 trains for Line No.1 of the subway in Salvador. By winning the 300 billion won project to build trains for subway Line No.2 in 2013, its accumulated orders in Brazil topped 1 trillion won over the past decade.