A view of SR Co., operator of Super Rapid Train (SRT) in South Korea, which announced plans to localize railway parts to reduce import reliance on Japan. [Photo provided by SR Co.]

SR Co., South Korean provider of passenger transportation services and operator of Super Rapid Train (SRT), will seek to reduce reliance on Japan-made parts by replacing key railway parts with those developed by local companies amid escalating trade disputes between Seoul and Tokyo.

SR said on Tuesday that it will increase use of key railway components developed by Korean small- and mid-size companies as part of national research and development agenda. Currently, most of the key parts in a high-speed railway in Korea are imported mainly from three countries with advanced railway technology – Japan, Germany, and France.

The components SR is vying to localize are axle bearing of a railway vehicle supplied by Iljin Co., automatic coupling device by Yujin Machinery Ltd., and oil damper by Mando Corp., in which each of them are all imported from Japan, Germany, and the Netherlands.

But those components have been also designed and manufactured by local firms using indigenous technologies as part of the Ministry of Land, Infrastructure and Transport’s research and development projects.

SR’s contracts to purchase the three railway component parts from local companies would substitute 64.8 billion won ($53.4 million) worth imports, it expects. SR plans to sign a purchasing contract with local companies for trial products this year and undergo high-speed railway suitability examination to check their performance and safety starting next year before signing on official purchase and maintenance contracts in the following year at the earliest.

SR also will tap into technology exchange programs to help local small- and mid-size companies make inroads into overseas markets.

Kwon Tae-myung, chief executive of SR, hopes that its contracts to buy local parts can encourage its competitors to follow suit and pave the way for local small- and mid-size companies to compete in the global railway component market. The latest move is also expected help SR save costs by diversifying component purchase channels.

With the latest decision, SR has joined the country-wide move to develop local components and materials that can replace imports from Japan. Many Korean consumers have also been voluntarily boycotting Japanese goods.

According to a survey conducted by local pollster Realmeter, 64.4 percent of the respondents said they have been opting for Korean brands or goods instead of Japanese goods and services in protest against Japan’s decision to tighten curbs on exports to Korea. The relations between the two states have fast deteriorated since Tokyo slapped Seoul with a series of tighter trade controls.

SR is the operator of SRT that runs between Suseo Station in southern Seoul and major cities in Korea.

By Choi Hee-seok and Lee Eun-joo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]