The machine building company “Sinara – Transport machines” (STM), says it may be forced to dismiss 20% of personnel because it has lost most of its orders from Russian Railways for cranes and other railway service machines.
Sinara has lost 85% of the orders from Russian Railways for railway service machines. Because of decreasing orders from the railway monopoly, the main client of STM, 7,000 people on its plants have not worked since August. The total personnel number in STM is 32,000 people, so about 20% of its personnel is questionable. Now, the company is looking for a way to re-qualify these people
Government officials have said that a firing of this magnitude is an “unacceptable decision” and suggests resolving a problem with Russian Railways and Ministry of Trade and Development. Also, the government should increase Russian Railway’s investment program for about US$ 150 million (10 billion Rubles) to resolve this problem. Last year, STM supplied railway machinery valued at US$ 330 million, but this year’s expected order portfolio is valued at US$ 120 million.
According to Russian Railways, its approved investment program for 2021 includes the purchase of 560 units of railway service machinery, 90% of which is purchased from STM. Read The Article
PSR Analysis: STM is integrated with TMK, a large metallurgical company. Both companies have the same owner, which is one of active participants in a recent confrontation between the Russian Government and local steel companies. This may be a reason for the current issues with order losses. Another possible reason is increased prices for railway machines, caused by increased steel prices. PSR
Maxim Sakov is Market Consultant – Russia Operations for Power Systems Research
