Last year sales of Interpipe’s railway division on the European market surpassed 80,000 tons of products. This indicates that despite the difficulties caused by the full-scale war the Company has been growing and increasing its export volumes. In the structure of the divisionʼs sales, exports to all foreign markets reached 90% with Europe accounting for 47% share became a ʼdomesticʼ market.
Interpipe currently supplies railway products to all European countries. As a result, two out of three freight cars in Europe are fitted with solid-rolled wheels manufactured in Ukraine. Having conquered the freight rail market, the company has set an ambitious goal of significantly increasing sales in the rail passenger segment by 2032. How can they achieve this? To find it out Forbes BrandVoice talked to Alexander Garkavij, Director of Railway Products Division at Interpipe.
Alexander Garkavij, Director of Railway Products Division at Interpipe
How it all started
The first deliveries of railway products by Interpipe to Europe took place in the early 2000s, but the Company became more focused on the European market in 2012-2013.
It was then that investments were made in finishing and assembly facilities, with a particular focus on product quality. Back in 2015, Interpipe began exporting to Europe wheelsets (a locomotive or carriage component consisting of two railway wheels pressed onto an axle) assembled in Dnipro. At the same time, the railway divisionʼs R&D center kept developing new products tailored to each customer. In 2019, the company launched its own line of wheels under the ULTIMATE brand for various freight cars on the EU market. «Since then, our design has been the most widely used in Europe. The ULTIMATE products are considered to be the best freight wheels in terms of performance», points out Alexander Garkavij.
Initially, annual production volumes of wheelsets in the European market did not exceed 10,000 units. However, with the launch of a new large wheelset assembly shop in the winter of 2022, just before the outbreak of a large-scale war, the production level is now 18,600 units, with capacity utilization at almost 100%. Moreover, Interpipe plans to invest in their expansion to assemble 22,500 wheelsets for Europe in 2026.
Ruslan Illichov
the President of the Federation of Employers of Ukraine
The development of value-added production and, most importantly, its export are fundamental principles of the countryʼs economic independence. Nowadays, Ukrainian business needs to focus on developing the production of complex products. The top exports should include products that create added value and provide jobs for thousands of Ukrainians. Interpipe is an example of such approach, exporting ¾ of its products to Europe, meeting about 50% of the EUʼs needs in some niches. Last year, the company achieved record shipment volumes, emphasizing the importance of Ukrainian products on the global market. In addition, the taxes paid by the company in 2024 reached UAH 5.5 billion, up 27% from 2023. The increase in exports and budget contributions during the war is an indicator of the industryʼs long-term promising strength, its potential. Crucially, Interpipe uses Ukrainian raw materials in its production. This creates a multiplier effect, with tens of thousands of people getting jobs and budgets at all levels receiving income. In fact, this ensures our economic independence.
In 2024, sales of Interpipeʼs railway products in Europe exceeded the level of 2021. The geography of ʼfreightʼ sales extends from Spain in the west to Slovakia in the east, from the Scandinavian countries in the north to Greece in the south. «We are now supplying our European customers with more products than we did before the war. Definitely, launching the new shop for wheelset assembly helped us a lot. However, this was our strategy. We had been preparing our facilities and commercial contacts to increase supplies to the EU», said Garkavij.
ULTIMATE products are considered to be among the best cargo wheels in terms of performance parameters
ULTIMATE products are considered to be among the best cargo wheels in terms of performance parameters
Changes in the sales structure
With the onset of the full-scale war, Interpipe was somewhat forced to focus on the EU market, as some markets, primarily in Asia, were lost due to the significant increase in the product transportation costs. However, even in Europe, not all customers were happy to work with a Ukrainian company given the current military risks. «Undoubtedly, the downtime of Interpipeʼs facilities immediately after the invasion made customers nervous. Some of them put certain contracts on hold. Others, on the contrary, were very supportive. For example, the largest freight car leasing company in Europe, the German-based VTG, prolonged its contract with us, initially until 2024, and our cooperation is still ongoing», told Interpipeʼs railway products division director.
In general, the main contracts were retained, and over the past three years, the company has been able to attract new customers in Europe. This has led to a redistribution in the sales structure of railcar wheels. «Before the war, the main customers in the freight segment were railcar repair and leasing companies, but now we are mainly focused on cooperation with companies that build new freight cars», said Alexander Garkavij.
Interpipe railway wheels
In particular, in 2024, Interpipe signed a one-year agreement with the European division of Greenbrier Group, one of the worldʼs largest railcar builders, to supply 5,000 wheelsets. Interpipe also signed another new contract with Tatravagonka, a Slovakian machine-building company that primarily manufactures freight cars. This is a major success for the Ukrainian company, as Greenbrier and Tatravagonka together produce about 70% of all new freight cars in Europe. «At the same time, this year the European market is unfavourable, with freight traffic falling, therefore, the demand for new railcars is declining. This has a negative impact on us», emphasizes Mr. Garkavij.
Ruslan Hashev
the Chairman of the Board of the Export Credit Agency
Expanding exports of Ukrainian railway products to Europe is a strategic priority for the development of the national industry. Entering European markets opens up access to new partnerships, attracts investment, and enhances the competitiveness of Ukrainian manufacturers. At the same time, the biggest challenges for Ukrainian companies exporting railway products include compliance with European technical standards, such as TSI certification, competing with European manufacturers, and financial risks associated with delayed payments from customers or the need to secure credit resources to fulfill export contracts. This is where government support for exports becomes a key factor in increasing the international competitiveness of Ukrainian manufacturers. In this context, the role of the Export Credit Agency of Ukraine is strategic, as we provide financial instruments that enable companies to operate in new markets with new counterparties with minimal financial risks and attract affordable financing for the execution of export contracts.
The «passenger» focus
With its strong position in the freight segment, Interpipeʼs railway division is tasked with significantly increasing shipments and expanding its portfolio in the passenger segment. In 2020-2021, the Company successfully shipped passenger wheels for Deutsche Bahnʼs high-speed trains.
However, to increase its share in this market, which is currently estimated at about 5%, Interpipe must expand cooperation with national railway operators in Europe, in particular, Spainʼs Renfe, Franceʼs SNCF, and Italyʼs Trenitalia, as well as complete certification with global carriage corporations such as Siemens, Alstom, and Stadler.
Unlike freight wheels, which have 10-15 standard types, in the passenger segment, each train or electric train has its own wheel design, which may require the development of a separate production process, from steel casting to machining and coating, for each new wheel design. Therefore, first of all, Interpipe will need a large number of highly skilled engineers, as the wheel for a specific passenger rolling stock means developing a separate product. Moreover, the company plans to continue upgrading its production facilities.
Automated wheel inspection line
Control of geometric parameters on a Mora coordinate measuring machine
«Furthermore, letʼs not forget that decarbonization and green steel are the leading topics in Europe. This is where the investments made in advance are already enabling Interpipe to be the most efficient producer in terms of reducing CO2 emissions. By switching to electric arc furnace technology and closing down our open-hearth production, we have reduced the carbon footprint of our railway products by 47%. This is a great achievement», emphasized Alexander Garkavij.
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