Workers assemble subway trains at CRRC Changchun Railway Vehicles Co in Changchun, Jilin province. WANG HAOFEI / XINHUA

China Railway Rolling Stock Corp, the country's railway vehicle and equipment manufacturer and exporter, announced on Thursday that it will build a plant in Canada to further expand its marketing channels in North America.

The train maker said in a statement that the new facility, located in Moncton in New Brunswick, will create more than 200 jobs in the first phase and generate more than $1 million in tax revenue for the local government annually. The plant is capable of manufacturing heavy load, special railway vehicles and railway vehicle brakes.

The plant was jointly set up by Sichuan-based CRRC Meishan Co Ltd, a freight train maker under CRRC, Moncton-based ARS Canada Rolling Stock Inc, a local railcar manufacturer and service supplier, and a CRRC subsidiary in Hong Kong. They gained approval from the Canadian government in June 2016.

CRRC said the establishment of this facility will enhance its market presence in North America. However, the company's headquarters in Beijing did not disclose the total investment amount and designed manufacturing capacity.

The new company's main business is to carry out sales of cargo trains, research and development work for freight trains that can be operated in North America, as well as manufacturing freight trains including open-top wagons, covered wagons, tankers and flat cars.

The statement said that CRRC's long-term goal is to assemble freight trains and provide after-sale services to clients in Canada.

"Canada is rich in commodity goods including copper ore, nickel ore, iron ore, petroleum, wheat, soybean and other agricultural products. It is a good growth point for Chinese cargo train manufacturers to carry out a localization strategy in the country," said Feng Hao, a rail transportation researcher at the National Development and Reform Commission.

Feng said as CRRC's other subsidiaries such as CRRC Qingdao Sifang Co Ltd and CRRC Changchun Co Ltd have built manufacturing facilities in Illinois and Massachusetts to produce passenger trains in the United States, so it is possible for its Canadian facility to supply cargo trains to the markets in the US sooner or later.

CRRC Meishan so far has shipped more than 5,000 freight trains to the global market. It also produces special vehicles for clients in resource-rich countries such as Australia and Argentina.

Pan Shuping, general manager of CRRC Meishan, said it is necessary to conduct research and development in fast-growing markets such as Southeast Asia, Africa and Latin America, because they have different standards in railway infrastructure and services.