ABB establishes traction transformer joint venture in China

Contributing to the development of China's railway industry

Beijing, China, December 20, 2005 - ABB, the leading power and automation technology group, announced today that it has signed a contract with Datong Electric Locomotive Co. Ltd. (DELC) to form a 50:50 joint venture - ABB Datong Traction Transformers Co., Ltd.

"We are confident that the new joint venture will contribute to China achieving its goal to modernize rolling stocks in the country," said Peter Leupp, chairman and president of ABB in China. "The strategic move underlines our commitment to supporting China's development with ABB's advanced technologies."

Leupp added that the new company brings the total number of ABB's companies in China to 25.

Headquartered in Datong in North China's Shanxi Province, the new company is set up for the production, sales and service of traction transformers for rolling stock manufacturers in China. ABB and its partner DELC are investing around $ 15 million in the new joint venture, which will be managed by ABB.

China has seen rapid growth in its railway market over the past few years. It is reported that the operating length of railways in the country will increase from 73,000 kilometers in 2003 to 100,000 kilometers in 2020. The high-speed passenger transportation network and freight transportation lines are expected to cover all major cities in the country. China will be investing around $ 240 billion in rail-transportation before 2020. One third of this investment will go towards purchasing locomotives and rolling stocks, for which light weight and high performance traction transformers are required.

ABB is the largest supplier of traction transformers in the world through the Product Line Traction Transformers based in Geneva (Switzerland). Today ABB Traction Transformers are used worldwide and manufactured in Switzerland, Germany, India and now China. " The new joint venture is a key milestone for the ABB global leading presence in the traction transformers business. It contributes significantly to the growth of ABB in the railway business, " added Jean-Luc Favre, Managing Director of the Product Line Traction Transformers.

As the traction transformer manufacturing base of China North Rolling Stock Group, DELC has been developing and producing traction transformers as components for electric locomotives. It is the only domestic enterprise that is capable of making both core and shell type traction transformers.

The new company is scheduled to start operating in August of 2006.

ABB has invested more than $600 million in China and plans to invest at least $100 million in new product lines and factories by 2008, which forms an important part of its five-point strategy for China.

ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impacts. The ABB Group of companies operates in around 100 countries and employs about 103,000 people worldwide. ABB has a full range of business activities in China, including manufacturing, R&D, sales and service, with 8,000 employees, 25 joint ventures and wholly owned companies, and an extensive sales and service network across 30 cities. To know more about ABB, visit www.abb.com.cn.

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