EuroChem to Create its Own Railcar Repair Facility
OREANDA-NEWS. On July 24, 2007 pursuant to the decision of the Management Board of EuroChem Mineral and Chemical Company dated April 26 2007, the Company has started the creation of its own railcar repair facility - the Depot-EuroChem subsidiary - to be located at the mothballed site of Nevinnomyssky Azot house building factory. The project is planned to be worth over RUR 26 m, reported the press-centre of EuroChem.
Currently the total amount of rolling stock at the entities controlled by EuroChem exceeds 6,000 units (including mineral carriers, grain carriers, various tanks for different purposes, open-top wagons, covered wagons, and platforms). The main part of the existing own rolling stock manufactured between 1985 and 1995, whose service life is 20-25 years, requires annual scheduled maintenance, car body and boiler repairs. At present, scheduled maintenance is performed by outsourcing organizations, while routine maintenance is performed using own repair facilities. In both cases full and timely delivery of repair services has not been achieved. In addition, due to annual increases in maintenance costs and transport fees, car delivery or non-productive outage account for 20% of car maintenance cost. As a result, the Company faces additional spending to lease rolling stock of other owners to ship fertilizers and raw materials.
The above Investment Project is aimed at the reduction of EuroChem controlled entities costs for scheduled maintenance of own cars and rolling stock lease, making a profit from scheduled depot repairs and major overhaul services, obtaining of transport independence of EuroChem controlled entities from Russian Railways, and capitalization increase.
The DZO OOO Depot-EuroChem creation and the construction of car-maintenance depot (up to 5,000 scheduled repairs per year) will be performed in several stages:
- DZO OOO Depot-EuroChem establishment;
- project development and drawing up of car-maintenance depot construction documents;
- rail track construction;
- upgrade of existing buildings and facilities;
- purchase, installation and start-up of equipment;
- construction and laying of utilities and communications;
- development of the personnel list and personnel recruitment;
- obtaining of permits for rolling stock maintenance from inspecting organizations;
- acceptance of buildings, shops, and equipment, preparation of technical documents to obtain permits for car maintenance (to be performed by the established subsidiary).
The project is planned to be completed in April 2009.