Romanian railway engines producer Electroputere Craiova, once a symbol of industry in Romania, will cease production of railway stock. Now owned by the group Al Arrab following the 2007 privatization, the company recently asked its shareholders to decide on closing down its railway stock and urban vehicles production division, and instead focus on producing transformers. Its recent sales have been fueled by transformers.

When privatized for some EUR 2.3 million in 2007, the new owners said they wanted to increase the company's turnover five-fold and turn it into an international player. However, the company has not managed to post a profit in the last 11 years.

The company, listed on the Bucharest Stock Exchange (BSE) has sold assets worth some EUR 30 million since 2010. Electroputere recently lost a contract for assembling metro cars for Bombardier, which was selling them to Bucharest metro operator Metrorex. The metro operator instead started a new contract with Spanish CAF for metro cars.

Electroputere's main export markets are Greece, Syria and Jordan. Greece's economy is in tatters after four years of recession, while EU trade sanctions apply to Syria, as a result of the ongoing violent suppression of the population by the Assad government.

The Romanian industrial producer previously sold 12 hectares of the 62-hectare platforms it owned to real estate developer K&S Development, which built a shopping mall on the site called Electroputere Parc, with an investment of EUR 90 million.

editor@romania-insider.com