Russian Railways and TransMashHolding to Reduce Prices
OREANDA-NEWS. October 29, 2008. TransMashHolding and the biggest consumer of its products, Russian Railways, are now working on a joint programme aimed at reducing the prices of mechanical-engineering products, reported the press-centre of Russian Railways.
Lower prices for TransMashHolding products made for Russian Railways have become possible due to the falling price of the raw materials which make up a significant component of their total cost.
“Our goal is to maximise the effect of lower commodity prices,” said Andrey Andreyev, Managing Director of TransMashHolding. “We believe that lower raw material prices cannot but lead to lower prices for parts and components. We have already begun working closely with our suppliers.”
“Russian Railways is our most important partner,” said Andreyev. “We are ready to exploit the situation to reduce the prices of raw materials and components to ensure that, together with the railways, we can get through calmly and confidently the liquidity crisis sweeping through the financial markets.”
According to Vladimir Yakunin, President of Russian Railways, a joint programme to reduce the prices of products made by TransMashHolding is a logical step towards closer coordination and crisis management under the present circumstances.
Despite the fact that the prices of TransMashHolding’s products will fall, its total revenues in 4Q2008 will increase substantially compared to the same period in 2007 on the back of the rapid growth in output of marketable products, most of which are made for Russian Railways. Sales in 1H2006 grew by 36%. TransMashHolding does therefore not envisage any reduction in its development programmes.
Russian Railways accounts for about 70% of Transmashholding’s sales.