Progress Rail will produce new locomotive model in Minas Gerais

USA’s Caterpillar should start production of a new model in its locomotive plant in the city of Sete Lagoas (central region of the state) in the first quarter of next year. Carlos Roso, director-general of Progress Rail Services (PRS) in Brazil, the railroad industry arm of the multinational corporation, does not disclose the amount invested in the development of the machine, but explains that it will leave the line with an initial nationalization index of 60%.

Roso explains that the diesel-electric model will be unprecedented in the country, since it is a technology of narrow-gauge, alternating current locomotive.

Probably in the fourth quarter of next year, we will launch a third prototype that will also be produced in Sete Lagoas”, he adds.

Roso also reveals that the company has been negotiating with the federal government plans for railroad fleet renewal in the country, which may create a demand from 600 to 1,800 locomotives. We are talking and, if this is done, we will maintain our capacity for investment and development of new technologies, he says.

The company’s forecast is closing this year with about 70% of capacity occupied, thanks to orders made since its opening in November 2012. For the next year, the multinational corporation projects a revenue growth around 20% compared with this year.

Among the clients of the Caterpillar unit in Sete Lagoas are the mining company Vale S/A, MRS Logística S/A and Ferrovia Centro-Atlântica (FCA, owned by Vale), as well as other Brazilian concessionaires. The plant received investments of $70 million and has the capacity to manufacture 90 machines per year. Currently, the unit manufactures the Electro-Motive Diesel (EMD) brand model, a subsidiary of PRS.

The plant is operated by MGE Equipamentos e Serviços Ferroviários Ltda, also a Caterpillar group company, and was installed on land owned by FCA. At full load, the operations in the unit should generate about 500 direct jobs, and today, according to Roso, they already have about 200 workers.

During the official opening ceremony of the plant, company executives said that, if the orders continue going strong, the original 110-square meter production area might be expanded. The positive expectation is due to the investment package of $41.16 billion, announced by the federal government in August last year, in the construction of 10,000 km of railroads in the coming years.

According to the CEO of Empresa de Planejamento e Logística (EPL), Bernardo Figueiredo, the state of Mines Gerais should receive most of these contributions. According to him, out of the $41.16 billion, at least $13.57 billion should be directed to railroad branches crossing the state, reaching a total of almost 3,000 kilometers of rails.