Company strategy is based on the expected long-term growth of the container market in Russia and the CIS driven by fundamental factors such as the low container penetration ratio as compared to the developed markets, the continuing growth of the economy and consumer demand, as well as a further increase in industrial production of value-added products.
The strategy envisages TransContainer maintaining leading positions in the growing container transportation market, further optimisation of its terminal handling business, the continuing write off of medium duty containers from the Russian Railways network and further development of the integrated freight forwarding and logistics business.
According to a Company statement, “The strategy indicates the Company’s measures to further improve operational efficiency.”
While the strategy is based on organic growth in the key markets of Russia and the CIS, it does not exclude the possibility of new acquisitions in other markets should they be economically efficient and create material synergies for the Company.
The updated strategy assumes the stable growth of profitability, an increase in container transportation volumes up to 2.7m teu in 2020, the flatcar fleet increasing to 42,000 units and the share of logistics and freight forwarding services increasing to up to 50% of revenue.
To achieve these goals, the Company plans to invest up to 30% of net revenue annually in capital expenditure with the total accumulated CAPEX reaching up to Roubles110bn (US$3.6bn) by 2020. The major component of this expenditure will be on the expansion and improvement of the Company’s rolling stock.