Protecting North America’s Critical Infrastructure
Sojitz entered the rolling stock MRO business in North America in November 2015 through its investment in Cad Railway Industries Ltd. (Head Office: Montreal, Quebec, Canada; “CadRI”). In March 2020, Sojitz increased its investment in CadRI together with Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) to make CadRI a fully-owned subsidiary of Japanese companies.
Environmental Issues in North America
The need to reduce CO2 emissions is becoming a major issue worldwide as CO2 is a leading cause of global warming. Rail and heavy-duty trucking play an important role as a transport method in the U.S. and Canada, countries with vast land area where fossil fuels can be sourced domestically.
As global awareness of environmental issues increases, rail transport is gaining renewed attention for its low CO2 emissions. In particular, there is a growing need for a multimodal transport system that incorporates trucking as a last-mile solution to deliver goods to their final destination. Through its rolling stock MRO business, CadRI is providing vital support for the critical infrastructure of rail transport in North America.
Sojitz’s Track Record in the Railway Industry and History with CadRI
Sojitz’s rail division boasts a track record of over 12,000 railcars delivered worldwide, primarily to the North American market. In recent years, Sojitz has been involved in a collaborative project between the Japanese and Indian governments for the construction of a dedicated freight corridor connecting Delhi and Mumbai, and the company has established a firm hold on its position in the industry. However, in an effort to ensure further growth and build on its long history of railcar and railcar components sales as well as handling of large-scale contracts, Sojitz began considering investment in the railway service business, an industry with expected market growth and the potential for stable, sustainable earnings.
Sojitz ultimately set its sights on the railcar maintenance, repair, and overhaul (MRO) business as the arena where it would pursue this new challenge. At the time, CadRI was an independent company, maintaining a solid share of the industry through its work performing railcar MRO on passenger cars for Canadian transit authorities. Its clientele included companies in Class I, a category made up of major North American freight railway companies. CadRI has the unique advantage of being able to provide a wide range of services—from basic maintenance to large-scale overhaul—on various types of railcars including locomotives, passenger cars, and freight cars. The company was determined to leverage its unique strengths in order to expand its business, not only within Canada, but throughout the North American market.
Sojitz determined that the two companies’ aspirations and strategies were clearly aligned, and ultimately chose to enter the rolling stock MRO business through an investment in CadRI.
CadRI’s Strengths and its Geographical Advantage
CadRI is headquartered in the major city of Montreal, Quebec in eastern Canada. In 2017, the company purchased Caltrax Inc., a company located in Calgary, the largest city in the western province of Alberta and a central hub for Canada’s petroleum industry. This acquisition expanded CadRI’s reach, enabling it to cover the country from east to west.
Caltrax not only performs maintenance at its facilities in Calgary, it has also developed a mobile service using trucks outfitted with railcar maintenance equipment, allowing the company to provide rapid services across an even wider area.
CadRI’s strengths also include its ability to service three types of railcars: locomotives, passenger cars, and freight cars. The skills and expertise required for each type of car differ, and many companies specialize in the maintenance of just one variety. CadRI, however, with its diverse range of technical skills and know-how, is able to take a more comprehensive approach to railcar maintenance, which allows CadRI to address a wide variety of client needs, and also contributes to the stability of the company’s business.
In 2020, our lifestyles underwent significant changes due to the COVID-19 pandemic, and these changes reaffirmed the continuing demand for rail transport in North America. CadRI has taken every possible precaution to protect the health and safety of its employees as it continues operations at its factory, and the company supports the essential service of rail transport and helps to sustain daily life in North America behind the scenes.
Fausto Levy, CadRI CEO & President
Q1:Please describe the role/value of Sojitz, which is expected by CadRI
We have always appreciated Sojitz's support to keep us moving forward for growth. By becoming a member of Sojitz Group, CadRI is now in a great position to accelerate its business expansion strategically and geographically. Having the strong shareholders' support, CadRI is now aiming to become the leading MRO service provider in the North American rail market. In addition, we expect that Sojitz's global network will generate international business opportunities as well as advanced technologies from leading Japanese companies.
Q2:Please describe the KEY strength of CadRI
CadRI is one of the leading product and service providers of full remanufacturing, technology upgrading and refurbishment services in the North American rail market. With a large, highly skilled workforce, CadRI can provide best-quality products and services, offering a fast turn-around time at competitive pricing. Our unique business model diversified on several Rail Equipment including passenger cars, locomotives, and freight cars, and combined with our skilled workforce and a customer-oriented strong engineering solution, allowed CadRI to successfully develop and implement innovative solutions to assist a wide variety of our customers. CadRI is also recognized for its agility to act combined with great customer service culture.
Sojitz Employees Striving for Success On-Site
Executive Vice President/Chief Administrative Officer on assignment from Tokyo HQ
I act as Sojitz’s representative at CadRI. As an executive officer, I collaborate with CadRI’s CEO to make decisions regarding overall company management and any new business enterprises. I work to achieve both Sojitz and CadRI’s growth goals, ensure mutual respect, and promote mutual advancement, all while striving to overcome differences in culture and customs. I have a strong sense of my personal responsibility to further strengthen the relationship of mutual trust with CadRI that has been built by my predecessors in Sojitz’s railway business.
Joined Sojitz in 2011. Finance & Administration Manager on assignment from Tokyo HQ
My dream is to unite CadRI’s unique strengths with Sojitz’s expertise and network in order to expand the scale of CadRI’s business until it is the largest railcar MRO operation in North America. My hope is that we grow this railcar MRO into a business that represents Sojitz on the world stage. In order to act as a bridge between our two companies, I strive to maintain respect for differences in culture and ways of thinking, communicate thoughtfully, and always prioritize mutual understanding with my colleagues and partners.
Young and Mid-level Sojitz Employees Striving for Success in Tokyo
Joined Sojitz in 2006. Deputy Manager, Transportation Infrastructure Sect., Airport & Transportation Infrastructure Dept.
After working as part of the Risk Management Dept. and Logistics & Insurance Dept., I transferred to the Airport & Transportation Infrastructure Dept. in 2014. In this role, I have been responsible for bidding and execution of railway projects in India and Southeast Asia. After taking two terms of maternity leave, I took up the position of lead for North American operations in 2020. I hope to do everything I can to contribute to CadRI’s further growth and expansion in North America.
Joined Sojitz in 2017. Transportation Infrastructure Sect., Airport & Transportation Infrastructure Dept.
When I first joined the company, I was responsible for railway component trading and railway construction projects in Southeast Asia. I am currently working as Keiichiro Suzuki’s successor, supporting the post-merger integration of CadRI from here in Tokyo. I hope to work together with our team to grow CadRI into a core business for Sojitz.
Supporting the Railcar MRO Business from Japan
－The Japan Team: Experts Providing Backup for Their Colleagues On-Site－
General Manager Takashi Morita, Deputy Manager Risa Koi, and Yuki Sudo of the Airport & Transportation Infrastructure Dept. make up the team in Tokyo that collaborates with employees on assignment in North America to handle a wide range of tasks, including establishment of MRO business strategies, management of CadRI operations, and the post-merger integration of CadRI.
Just like component trading or railway construction projects. CadRI’s maintenance business requires a high level of project management ability. This means flexibility in interactions with clients, strict adherence to deadlines, and swift responses in emergency situations.
Sojitz is using all the experiences it has accumulated thus far in the rail industry, building on CadRI’s success to further advance the MRO business in North America and to create new value.
“Making CadRI North America’s No. 1 Railway MRO Business!”
In pursuit of this goal for excellence,
Sojitz and CadRI are working behind the scenes to support the daily life of people in North America through the railcar MRO business.