~ Enters growing Turkish rail market with 68% stake in railcar manufacturer

The Greenbrier Companies, Inc. has announced that it has completed an agreement between Rayvag Vagon Sanayi ve Ticaret A.S. (“Rayvag”) and Greenbrier’s European subsidiary, Greenbrier-AstraRail, to take an approximately 68% ownership stake in the railcar manufacturer and provider of railcar repair and parts services.

Rayvag is a railcar manufacturing company based in Adana, Turkey. Rayvag also provides maintenance services for railcars and manufactures bogies and spare parts for railcars in the region. It was founded in 2007 by Asim Suzen who retains a 32% equity interest in the business. Suzen continues to serve Rayvag as its Managing Director and is also a member of the Turkish Minister of Transportation’s Railway Transportation Association.

“Rayvag is committed to growth but could not achieve scale without this investment by Greenbrier,” Suzen said. “Greenbrier-AstraRail’s expertise in designing freight wagons that meet European rail standards, as well its world-class manufacturing systems and procurement practices, position Rayvag to respond to the rapidly advancing demands of Turkey’s freight rail industry. Greenbrier’s financial strength also provides Rayvag with a partner capable of pursuing the substantial growth that we foresee in the Turkish railway supply business during the coming years.  I am proud to lead Rayvag under Greenbrier’s majority ownership.”

The freight transport sector in Turkey is growing quickly and the Turkish government is committed to modernizing the existing rail system. Beginning in 2014, the state-owned Turkish Railways opened the rail network to use by private operators.  Since then, freight movement on the railroad is on the rise. With rail freight volumes expected to see an increase of 65 million tons by 2023, the Turkish government plans to expand rail lines, proposing to invest more than $23.5 billion USD toward rail infrastructure projects through 2023.  The Turkish rail industry also is migrating to European rail standards for its infrastructure as intercontinental rail traffic grows.  Greenbrier-AstraRail is the leading designer and manufacturer of freight wagons built to European rail standards.

Greenbrier’s presence in Turkey, through its interest in Rayvag, continues its pursuit of growth by accessing global freight markets. Adding Rayvag to Greenbrier Europe, which also includes Poland’s WagonySwidnica and Romania’s AstraRail, extends Greenbrier’s continental reach.  This allows Greenbrier Europe to acquire new railcar customers while also allowing it to serve existing customers which operate on the nearly 5,500-mile Turkish rail system.  Despite strong rail penetration across the country, currently only 5% of Turkey’s freight traffic moves by rail, compared to an average 17% of freight transported by rail in Europe.  The expanse of the Turkish rail system and Turkey’s strategic location between Europe and Asia makes it a prime location for freight rail growth.

“Greenbrier views Turkey and the Mediterranean region as a key corridor within the global freight railway system. Expansion into Turkey is a logical extension of our market-leading Greenbrier Europe operation. Turkey broadens Greenbrier’s presence in the region where we are successfully working with Saudi Railway Company (SAR) on key rail projects and are planning to partner with other Gulf Cooperation Countries on railway supply needs in those nations.  We look forward to growing our presence in the Turkish rail market and the opportunity to be a part of the industry’s growth within the region.” said William A. Furman, Greenbrier Chairman and CEO. “Greenbrier’s investment in Rayvag further demonstrates our commitment to enter promising international railcar markets.  This will produce greater shareholder returns as Greenbrier grows its leadership on four continents as a global manufacturer in the expanding worldwide freight railcar industry.”