The Luganskteplovoz company intends to outsource part of its production operations to foreign companies. The company is preparing to outsource the plating of components under a program aimed at improving its operating efficiency. The company is considering the Krasnodon-based Avtoagregat plant, the Lugansky Patrol state enterprise, and the Pervomaysk mechanical plant as possible partners, the Transport News Agency reports, citing Gudok.

Luganskteplovoz currently cooperates with 60 companies in the sector.

"Since the Soviet era, management of the factory has been based on an ideology in which a large part of what is used in the manufacture of rolling stock must be made at the factory. The factory has provided itself with all its components. However, this is not always cost-effective. There exists the possibility of outsourcing part of production in this segment while maintaining a high level of quality," said Artyom Ledenev, the head of the department of external relations at Transmashholding (which owns Luganskteplovoz), while commenting on these changes.

Ledenev said that certain parts of production are outsourced in test mode when outsourcing decisions are made and that how to organize full outsourcing is currently being determined.

Some of Luganskteplovoz’s non-core assets have already been sold under the program for improving the company efficiency. In the first half of 2013, 51% of the shares in the factory’s TOK repair facility were put on sale for UAH 1.6 million and 51% of the shares in the Lokomotiv-Resurs company were put on sale for UAH 10 million.

Luganskteplovoz has also leased its rubber and plastics workshop to the Stakhanov RTI Factory under the optimization program. According to the company, this allowed the company to preserve jobs at the workshop and ensure its full operation while primarily producing parts for the Lugansk plant. Currently, it is also planning to lease out the facility for production of large stamping parts on similar terms.

Luganskteplovoz produces mainline and shunting diesel locomotives, electric locomotives, direct- and alternating-current electric trains, and diesel trains. The company increased production by more than 70% in 2012, compared with 2011. It produced 162 locomotive units. It plans to produce 250 diesel locomotive units in 2013.