SINGAPORE: Japanese technology giant Hitachi Ltd is eyeing to double its railway business revenue in the next five years and Asean will be one of the key markets it will explore to drive growth, said its railway systems arm Hitachi Rail Europe Ltd Global CEO Alistair Dormer.  

"I think Southeast Asia is a very exciting market for railways in the future. We see some significant trends in population expansion, urbanisation and rapid economic development in the region...I think what will really become an engine of growth for major cities here is connectivity through high speed rails and mass transit system to bring cities closer together and reduce impact of air travel," Dormer told reporters at the Hitachi Innovation Forum 2014 held here today.

The group's railway business revenue was at 168.2 billion yen in FY2013, with 65% of it generated from within Japan with the remainder coming from outside the country.

Although Dormer said a lot of the targeted revenue growth would come from Asean, he declined to put a figure on it.

"It depends on projects, governments, and policies. At this moment, there are very encouraging signs, like the Kuala Lumpur-Singapore High Speed Rail (KL-SG HSR) project, but there are a number of challenges to overcome before it becomes a realistic project.

"Still, whether the line follows above or below ground, what is absolutely clear is that, if you look at the absolute macroeconomics of population growth and traffic congestion of our cities in this region, something needs to be done. So it [the KL-SG HSR] is not a question of if, but when," said Dormer.

There is a combination of high speed rail and mass transit transportation opportunities in the region and Hitachi, a leading expert in both technologies, is very well-placed to supply these products to the market here, he added

Indeed, in the area of high speed rail, Hitachi has led the way since 1964 with the Shinkansen trains. Since then, the group has delivered over 3,000 cars in the last 50 years to not only the domestic Japanese market, but also the UK.

After bagging the UK government's contract to supply 122 trains with 866 cars in July 2012, the biggest train order in the history of the country, Hitachi has been further expanding its presence in the UK. It moved its railway unit's headquarters to Britain in April to expand its business in Europe.

More recently, Hitachi announced on Oct 10 that it has been picked to supply trains and provide maintenance services to rail operator Abellio's franchise in Scotland. Reports said the carriages were likely worth up to US$460 million