KUALA LUMPUR -- China's leading railways manufacturer, China South Locomotive and Rolling Stock Corporation Ltd, unveiled a plan Wednesday to set up its ASEAN manufacturing center in Malaysia, citing great market potential in the region as well as the close China-Malaysia relations.

CSR Zhuzhou Electric Locomotive Co Ltd, a subsidiary under CSR and an active player in Malaysia's mass transit projects, announced the plan of the 50-acre facilities located in Batu Gajah of the Perak State, some 200 kilometers from the capital of Kuala Lumpur.

The company is investing up to 400 million ringgit ($126.7 million) in the "CSR ASEAN Rail Center", which would cover all-in-one scope of work of production, assembly, testing, overhaul and refurbishment, said Luo Chongfu, the company' s Vice President of Investment and Strategic Development.

"We are expecting to generate more than 800 jobs for Malaysians," he said.

"More importantly, it will substantially enhance Malaysian railway technology, know-how and expertise, maximize its localization degree and enrich the human resource pool," he added.

Fu Chengjun, another senior executive of the company, said the new plant is one of the most important to be set up by CSR outside of China.

The first phase of the project is expected to be completed by the end of 2014, with the annual capacity of the production of 100 to 150 carriages and the overhaul of around 150.

CSR ZELC has won bid for 20 sets of light rail vehicles for Malaysia's AMPANG Line Extension Project earlier this year, and the cars will be among the first to be manufactured by the new plant.

Its EMUs, or modern rail transport vehicles, has been operated in Kuala Lumpur since March.

Meanwhile, the company has decided to set up its regional headquarters in Kuala Lumpur.

Luo has cited the close bilateral relations between China and Malaysia, geographical advantage as the factors why his company had chosen Malaysia to set up its ASEAN manufacturing center and regional headquarters.

Luo predicted that ASEAN countries would need 1,100 new cars and refurbishment service for another 700 in the next five years, and the new plant in Malaysia would provide advantage for the company to tap into the market.

CSR, based in Beijing and listed on Hong Kong as well as Shanghai Stock Exchange Markets, has been developed into one of the major players in global railway transport industry and is one of the biggest by global sales revenue.