Ukrainian Railways Repair & Production unit transforms at war: From crisis to profitability

It is January 2022. Yevgen Shramko, a technocrat from the manufacturing industry, takes on a new mission. He makes his move into the public sector, taking the lead at Ukrainian Railways’ (UZ) Repair & Production business unit. The state of affairs in the business unit was disappointing, and Shramko is the man to turn it around. But then, the war came. He still managed.
“It was a question of here and now decision-making”, explains Shramko. “The situation changed every hour, and we needed to make quick decisions.”

For someone who came to improve the repair and production capacity of Ukrainian Railways, the first days of the war were a big setback. “Supply chains were severely damaged”, the Ukrainian Railways Repair & Production (UZRP) head reflects. “During the first three months of the war, it was all hands on deck. We were doing manual decision-making.” It was not quite the start anyone in a new job would hope for.

With the beginning of the war, UZ stopped operations with Russia and Belarus. A turn to Ukrainian suppliers became a priority, but that was not always a straightforward solution. Some components were not produced domestically, and many suppliers struggled with delays due to disrupted supply chains.

The biggest setback came with Russia’s occupation of Mariupol and the destruction of its landmark Azovstal factory. For Ukrainian Railways, it was the only source of three unique components: rails, baseplates and overlays, which the company uses for Ukraine’s 1,520-millimetre gauge tracks. No Azovstal, no production.

Business was looking very bleak. But as of 2025, a clear shift is visible in the performance and direction of UZRP. Changes in approach also brought changes in outcome: The joint stock companies have become profitable, production is back on track, and other parts of Ukraine see the Repair & Production unit as a role model for business management.

The business has come a long way, starting with production. With no steady supply of vital materials, UZRP’s stock of spare parts drained rapidly. A race against time began: The company had to act swiftly to identify and secure alternative sources of supply.

Restart of production

Although in-house production existed earlier, it was not as structured or prioritised. A year into the war, the department began to systematically expand and strengthen its capacities. By 2024, it had launched the production of over 100 components and spare parts.

That brought one major benefit: UZRP’s focus on domestic manufacturing helped save more than 170 million Ukrainian hryvnia (around four million euros), the equivalent of around 60 new freight wagons.

More generally, investments in domestic component production and cost optimisations resulted in record savings of over 400 million hryvnia in 2023 and 2024 (around ten million euros, equivalent to a new locomotive or 140 freight wagons).

By early 2025, the company achieved perhaps its biggest victory: it launched its own railway overlay production to replace the loss of Azovstal. Ukraine can build its own tracks once more. UZRP has already provided more than 60 tonnes of rail, the majority of which is currently being used for the Chop – Uzhhorod railway line.

Centralisation and integration

While UZRP worked to get its own in-house production up and running, Yevgen Shramko turned to the department’s organisation. The goal: efficiency and profitability. The method: centralisation and vertical integration. And that has worked out, even if the process has not yet concluded.

“This transformation has been a real-world demonstration of effective change management in a high-pressure environment”, representatives of UZRP tell RailFreight.com. “Under Shramko’s leadership, UZRP introduced clearer structures, streamlined internal processes, and implemented unified operational standards, all while navigating wartime disruption. His ability to lead complex organisational changes without compromising team cohesion has become a defining feature of his management style.”

Before, UZRP had many sub-units with various production methods that were operating at a loss. At present, large-scale mergers have already bore fruit. In the case of the joint stock companies, those have now been profitable two years in a row thanks to efficient operations, earning 234 million hryvnia (approximately 5 million euros) in total in 2023 and 2024.

Successful organisational changes

To illustrate, the 51 wagon repair units at UZRP merged into a single wagon department in 2024. They all offered the same services, but used different standards, service models and procurement systems.

Changing that setup has been a great success, and now Shramko is looking to turn not only the joint stock companies profitable, but the UZRP-owned facilities (the unit’s branches) as well. What’s more, the locomotive repair sector will undergo the same changes as wagon repair in the future.

In-house production and the centralisation of repair facilities have been positive changes for Ukrainian Railways Repair & Production. Yet, that is not necessarily always the case, explains Shramko. “We have to be very big to do everything on our own, but giants are not very effective”, he knows from experience in the private sector.

Specialisation, digitalisation

For that reason, UZRP has embarked on a path of greater flexibility, actively partnering with private businesses where it creates value. “Companies specialise, and so in 2025, we are fully committed to that course,” says Shramko. He aims to optimise yards and industrial spaces. “At least half of the available workspaces can be leased out to reduce costs. Other parts of UZ are also considering this business approach,” he adds.

Digitalisation is also a key priority for the Repair and Production unit, which plans to launch an Electronic Queue for wagon repair operations in 2025 to enhance transparency, automate planning, and eliminate inefficiencies. For Shramko, the initiative reflects personal commitment to addressing past challenges of opacity and corruption, with the goal of transforming the unit into a model of transparency, efficiency, and profitability, he explains.

Servicing Europe in Ukraine?

Other parts of UZ have taken note of the success of Repair & Production. Its effort to become profitable is now spreading to other parts of Ukrainian Railways, which look to Shramko’s business unit as a role model. “But none of these changes would have been possible without the support of the Chairman of the Board, Oleksandr Pertsovsky, for which I am truly grateful”, Shramko emphasised.

Аn energy audit, a lean approach and a strive to energy efficiency have played a role in the turnaround too, as well as procurement rules that have shrunk material expenses by 40% in some cases, despite rampant inflation in recent years.

What does the future look like for UZ Repair & Production? The future could be international. “We have the capabilities, labour, knowledge and low prices to service European rolling stock in Ukraine”, says Shramko. But if anything, long-term strategic planning is not leaving the department. “It was the answer to help the joint stock companies reach profitability in the last two years. You always need to make business-oriented decisions.”