Interview with Dieter Johannes FRITZ, President and CEO of voestalpine VAE GmbH
Worldwide, voestalpine VAE is the leader of the turnout and turnout-related technology.The continuous development of railway infrastructure is a challenge to which voestalpine VAE Group responds by delivering high-quality products, improved along the 160 years of experience. As provider of economic solutions, innovative products and wide range of services, voestalpine VAE is active on all continents with over 40 production and sales facilities.
voestalpine VAE’s vision is clearly determined by “mega-trends” and the globalization process, the increasing mobility demand and urbanisation are aligning to the demands of modern society characterised by the necessity of a safe, eco-friendly and rapid transport. The answer to all these challenges is the innovative products and efficient solutions designed to reshape the future of transportation. The innovation of products has always relied on investments in the research and development area as a method of increasing the efficiency and performance of railway transport. Every year, the company invests around EUR 10 Million in research and development.
The development strategy of voestalpine VAE focuses on allocating investments to increasing the domestic capacity, but also on building new plants due to the trends of boosting railway transport, especially passenger railway transport. Growth is not expected only in the EU, but also in Asia, Middle East and CIS, regions where rail transport promotion increases and which launch more and more railway infrastructure development projects. But, although there are many differences between the railway systems in these areas, increasing competitiveness and the market share of railway transport are the main common objectives which make the railway industry to constantly develop its products, solutions and concepts, to build an efficient and performing railway system capable to meet the mobility needs of passengers and goods.
I n Romania, voestalpine VAE APCAROM, with an experience of over 40 years, has reinforced its market position as the only provider of turnouts for railways, metro and tramway, and for the companies with individual industrial railways. Last year, the company initiated and still carries out the project “Contribution of VAE APCAROM to the sustainable development of the south-eastern region by upgrading the production sector of Buzău plant” with European funds. The project’s objective was to modernize the production sector through the acquisition of new technical devices, of performing orders and technical documentation management system and the extension of production capacities. The investments don’t stop here: according to the latest information provided by the company’s representatives, the company is included in the integration strategy with allocation of an initial investment package of over EUR 5 Million.
To analyse and discuss about the most important technical solutions, in October, between 7th -8th, voestalpine VAE APCAROM organised at its headquarter in Buzau the Technical Conference of voestalpine VAE Group with participation of 45 de-legates, from 18 countries, in the presence of voestalpine VAE GmbH’s Management: CEO, Mr. Dieter Fritz, CFO, Mr. Werner Saringer, COO, Mr. Rainer Oswald and of voestalpine VAE APCAROM’s : CEO, Mr. Vintilă Mocanu and CFO, Mr. Marius Adascalitei.
Mr. Dieter Johannes Fritz, President and CEO of voestalpine VAE GmbH, agreed to talk in an interview for RailwayPRO magazine about the challenges launched by new rail transport development trends, the industry’s impact on increasing the competitiveness of this transport mode and the development opportunities in Europe, Asia and Middle East.
RailwayPRO: The period of economic crisis had a negative impact for all economic activities, and now the political class (especially in Europe) has no positive growth signals. What do you think about the situation of the industrial railway sector?
Dieter Fritz: We still believe that railways have a good basis for the future because it is in our opinion the most economic transportation system, both for goods transportation but especially for passenger transportation. And therefore, we believe there will still be a must for future investments all over Europe, both, for longer distances but especially for city transportation systems. So, tramways, underground systems still will enjoy a substantial increase in the future in Europe, but also outside Europe. As I’ve mentioned before, not only for passengers, it’s for freight too, but this segment is more complex in Europe because of the geographical environment, different systems that are still used in different parts of Europe. Passenger transportation will be based on specific lines, especially for the urban transportation which is very much independent, and therefore, this will be definitely an important factor for the future and cities will need more public transportation, otherwise they will have difficulties in regard to the ecological environment and logistics systems.
RailwayPRO: The railway market of industrial products suppliers is expected to increase by 2.7% per year over the next 5-6 years (according to UNIFE). What do you think about this prognosis consi-
dering the still fragile economic situation?
Dieter Fritz: As I’ve mentioned before, the railway transport will increase, so this prognosis is quite realistic
RailwayPRO: What is the development strategy of voestalpine VAE? What are the business challenges and opportunities for Europe, Asia and the CIS?
Dieter Fritz: In general, we believe that there is still room for further extension and we are investing in internal capacity increase and also in building new factories in different parts of the world. We have a very good growth potential for the future. Business challenges and opportunities for Europe: for the first, I have to mention that in Europe there is a diversified situation, because there are EU member states and states outside EU, so there are different countries in Europe in a completely different situation compared to others. So, challenges will be in order to resolve the difficult situation especially in Southern Europe and to overcome the difficulties and once they are stabilized, then Europe and politics can focus on integrated railway strategy which has been target in the past, but at the moment I believe that is not a priority because of much more important problems that EU has to deal with. It will take some time and they have to solve that and afterwards it will be a new focus on some integrated railway strategy. Already many governments have realised independently the importance for investments into the right direction that is railways. This is because railways are getting more and more competitive and if we provide good products to the railways, that will strengthen the competitiveness against other transportation systems and we believe that we can definitely contribute to it.
Also, in Asia there is a good potential, so VAE also invested in this part of the world and here is a good potential, I underline, especially in passenger transportation, in urban transport systems that will register high increase in Asia.
RailwayPRO: How would you describe the market covered by your company by comparison between Europe and Central Asia, two continents that try to improve their railway infrastructure including transcontinental connections and to harmonise the standards of the infrastructure-dedicated railway products?
Dieter Fritz: Europe and Asia have different industrial bases and Asia mainly benefits at the moment from a lot of activities that still have to catch up with standards and levels that we already have in Europe. So, here is a lot of potential to develop railway systems and products, and on the other hand there is the different political environment and also cost structure is different. There are many differences that need to be updated or improved, and this will lead to increase of competitiveness in this sector.
RailwayPRO: According to the World Rail Market Study, launched by the European Rail Industry Association (UNIFE), a constant growth of the world railway market is estimated by 2017 and the Middle East, Russia and the CIS are among the regions which experience a strong market growth. What do you think about this estimation and what are voestalpine VAE’s development opportunities for the markets outside Europe?
Dieter Fritz: For the moment, Russia and Former Soviet Union states are not a very high priority for us, because they have very much their independent system and have not yet opened up for international turnout business. So, their procurement at the moment is mainly focused to the own local industry and we hope that this will be changed in the near future and they will open up also for the international turnout business, that means other technologies, that can be attractive for these markets, but for now we experience this openness only in very limited segments. For example, voestalpine VAE has just been successful for the tramway system in Sankt Petersburg and we are supplying for such projects whenever customers are open to procure outside of Russia and we are very happy to participate. This project is being at the moment carried out together with voestalpine VAE APCAROM.
RailwayPRO: voestalpine VAE co-vers the most important railway markets (worldwide). From your point of view, what are the most competitive markets and how would you describe them?
Dieter Fritz: From my point of view, a very competitive environment in the railway business you can find in North America. Here, most of the railways are privatised and they really follow the principle of generating money and profits by doing their transportation business and they have set the system that is working very well and show that railways can be very competitive with other transportation systems. Relating to this, voestalpine VAE implemented strategies for this market to become a leader here, and we did accomplish that: we have above 40% of the market share in North America and we are operating seven manufacturing plants, plus another factory in Mexico. So, we have a very strong position in this competitive environment and our set up is also a very competitive one because we could establish a strong position in the last 20 years when we started to do business here. This shows that we are able to work in a competitive way in difficult market environment.
RailwayPRO: voestalpine VAE supplies products for all railway systems (no matter the type of network, the gauge etc.). What are the challenges you are facing with regarding the different standards, laws and customer requirements?
Dieter Fritz: This is something that has become a standard for us. voestalpine VAE is operating more than 40 track work plants in all continents and this helps a lot in order to deal with the different requirements, legal, technical, economic parameters in all parts of the world under different conditions. The production and sales centres all over the world make sure that local requirements and customer demands are known so that we can supply customized and value-adding products and services. So, we have learned to think international, to act very flexible not only follow the customer requirements, but even proactively develop specific solutions for our customers in the different conditions and in all systems: heavy-haul, high speed, mixed traffic conditions, metro, tramways. We have a very good know-ledge for all these circumstances.
RailwayPRO: Through the liberalisation of the railway market, infrastructure companies are trying to be more dynamic and more focused on projects for the improvement of railway infrastructure quality which also means the acquisition of modern products. What is the answer of the components manufacturers in this segment for business development and for the improvement of infrastructure quality? How does voestalpine VAE answer to this challenge?
Dieter Fritz: In order to support the infrastructure providers, we are supplying very reliable material to them, first of all, very high quality and products with maximum availability. It is very important for the infrastructure provider to further offer reliable systems to their customers, to the rolling stock providers and therefore we understand this challenge very well and we do not only manufacture very reliable products, but also electronic monitoring systems which shall help the infrastructure provider to optimise the working reliability of the track and turnout systems. This means they see the performance of all critical parameters on a real time basis. The systems are not only for turnouts, there are also for monitoring the signalling systems, track circuits, for all fixed infrastructure assets, as well as for the rolling stock. We produce electronic monitoring systems which shall help the reliability, availability and safety, in order to operate in the best way the rail systems. So, this is the development that we have done within the last 15 years and many railways are using that already and all these systems are important factors for the future efficiency and competitiveness of railways.
RailwayPRO: Over the last period, the countries in the Middle East announced important projects for infrastructure construction, projects worth tens of billions of dollars. What are the major changes that these projects bring to the railway industry and how does your company approach these opportunities?
Dieter Fritz: There are no real changes; the only change is our philosophy in also setting up manufacturing factories in these areas. We haven’t produced in the past in this region, but now we are investing here in order to follow our philosophy: this means ‘think globally, but act locally’. We really consider the different parameters worldwide so we started to produce and also to set up manufacturing plants in important railway markets to be able to really work very close with the customer and to support his flexibility and efficiency.
RailwayPRO: voestalpine VAE is specialized in innovating products and invests massively in research & development. What projects do you have in plan for the next years and what can you tell us about the value of investments allocated to these projects?
Dieter Fritz: voestalpine VAE is the technological leader in business turnout and turnout related products and we are investing roughly EUR 10 Million per year only in research & development and this does not include the standard engineering improvement; this amount is really for new developments every year and this means that we work for the future of railways in the different parts of the world. We can proudly say that we have been contributing in many countries and continents to a complete change in the turnout industry, because we develop hand-tailored solutions for the various requirements of the different customers.
RailwayPRO: What can you tell us about the dynamics of rail projects compared to rail urban transport in Europe?
Dieter Fritz: As for us, there are not really any major differences. Of course, as I mentioned before sometimes is a little bit easier for urban transportation to develop the projects because it is regionally limited. Whenever you see a railway project for long routes implies different parameters which also play a role so that can get realised not always is that easy to build tunnels, to get permissions for certain things, and there are various influences. They maybe could be more complex and I believe that in urban transportation not only the politicians but also the public is realising the need to invest into urban transportation, because otherwise cities are getting too much crowded and road transportation is no longer able to provide solutions to the people in order to have efficient transportation. Rail urban transportation is ‘a must’ and everybody is starting to realise its importance.
RailwayPRO: What is the companies’ strategy for Romania in order to determine a faster development of railways?
Dieter Fritz: We see voestalpine VAE Apcarom being one of the lead companies of the voestalpine VAE Group and this company here will enjoy further development in the future, so they are integrated part of the growth strategy of voestalpine VAE and we already have done substantial investments in this company in order to modernise the production, to be able to produce products with the highest technological standards and for providing complete package solutions to our customers. The next step of the investment program is also to support these package solutions. This means also to implement switch machines and other products from the signalling segment into our turnouts and monitoring solutions that I’ve mentioned before that will be part of an integrated strategy for voestalpine VAE Apcarom which enjoys a very high focus for the future development. Relating to the amount, we’ve just decided, of the investment package, a roughly EUR 5 Million, but this is only one step in our development strategy; it’s not the completely investment that we are foreseeing; we are going to invest more than this amount. I mention here that starting from 1998, VAE invests an average of almost EUR 1 Million every year in this company, but now there are some special investment packages. The company belongs to the best performance of the voestalpine VAE Group and we will invest in order to support the future development of this company.
Share on:
