Strategic steps

Strategic steps 2007

• In January Wärtsilä and Hyundai Heavy Industries Co. Ltd (HHI) signed an agreement to set up a 50/50 -owned joint venture in Korea to manufacture dual-fuel engines for LNG (liquified natural gas) carriers for the Korean, Japanese, Chinese and Taiwanese shipbuilding markets. The first engine will be delivered during the second half of 2008. The joint venture will employ approx. 150 people.
• In February Wärtsilä acquired the Swedish company Senitec AB. The company specializes in environmental technology products for separating waste, such as oily water and sludge, in power plants, harbours and ships. The acquisition added 5 people to our workforce.
• In February we acquired the entire business of Marine Propeller (Pty) Ltd in Cape Town, South Africa. Marine Propeller (Pty) Ltd focuses mainly on repairing propellers. The acquisition added 8 people to our workforce.
• In May we continued extending our service offering in Propulsion services with the acquisition of UK-based propeller repair company McCall Propellers Ltd. The acquisition added 33 people to our workforce. 
• In July we finalized the of the marine business of Railko Ltd. in the UK, a company specializing in stern tube bearing technology. The acquisition improves our competitive position in oil-lubricated bearing systems and adds water-lubricated bearings to the product portfolio. The acquisition added 25 people to our workforce.
• In August we acquired the Scottish company, Electrical Power Engineering (Scotland) Ltd. The company specializes in electrical power engineering solutions for marine, offshore, industrial and utilities segments. The acquisition added 31 people to our workforce.

Other strategic issues:

• In January Wärtsilä announced a public offer to the minority shareholders of Wärtsilä India Ltd to acquire 1,240,599 shares, or 10.3% of the share capital. The delisting offer was successful and 8.2% of the total shares were acquired. The shares of Wärtsilä India Ltd were delisted from the Bombay Stock Exchange on 18 June 2007.
• To improve marine customer service in the rapidly growing Chinese markets, we opened a large reconditioning workshop in Shanghai in March. In May a service workshop was also opened close to Saigon port in Ho Chi Minh City and an office in Hanoi to serve the growing Vietnamese shipping, shipbuilding and power industries.
• The demand for training services is steadily rising and Wärtsilä opened a new training centre in South Korea, the world’s largest shipbuilding country, to provide training for customers’ engineers.
• In May Wärtsilä and Vietnam Shipbuilding Industry Corporation (Vinashin) signed a licence agreement for the manufacture and sale of Wärtsilä low-speed marine engines in Vietnam.
• In October Wärtsilä and Bryansk Engineering Works (BMZ) signed a license agreement for the manufacture of Wärtsilä's low-speed marine diesel engines in Russia.
• In November Wärtsilä and V.Ships, specialised in ship management, agreed to cooperate on a provision of a broad spectrum of marine and technical services in the marine market.
• Wärtsilä Ship Power was reorgaised into five Ship Power customer segments: Merchant, Offshore, Cruise& Ferry, Navy and Special vessels. The aim is to better respond to market requirements and technology development, as well as to be prepared for market fluctuations.
  

Strategic steps 2006

• In February Wärtsilä acquired Aker Kvaerner Power and Automation Systems AS (AKPAS) from Aker Kvaerner. The acquisition supports Wärtsilä’s growth strategy and it will enhance Wärtsilä’s product portfolio in electric propulsion, power distribution and automation, especially in the oil and gas and offshore sectors.
• The alliance formed by Wärtsilä Automation Norway and the American Emerson Process Management increases Wärtsilä’s capabilities to offer process automation  competence for FPSO vessels.
• In February Wärtsilä announced its acquisition of the entire business of Total Automation Ltd, a Singapore-based public marine automation company, and all Total Automation’s subsidiaries. In addition to general marine automation, Total Automation has a strong foothold within the offshore and LNG sectors. The transaction complements Wärtsilä´s earlier electrical and automation acquisitions.
• In March Wärtsilä and the Estonian BLRT Grupp agreed on establishing a ship service company in Lithuania to serve the Baltic market.
• The Ciserv service group was integrated into Wärtsilä’s Services business in May.
• In May Wärtsilä sold 10 million Assa Abloy AB series B shares, after which Wärtsilä owned 7,270,350 series B shares representing 2.0% of Assa Abloy’s share capital and 1.4% of the votes.
• The German INTEC Injectortechnic GmbH, acquired in July, strengthens Wärtsilä’s capabilities in installation and services for fuel-injected equipment.
• Wärtsilä Qiyao Diesel Company Ltd (Shanghai), a marine generating set factory  jointly owned by Wärtsilä and the Chinese Shanghai Marine Diesel Engine Research Institute (SMDERI), was inaugurated at the end of June. The joint venture marks a strategic step for Wärtsilä to be closer to its Asian customers and to raise its market share in marine auxiliary generating sets.
• In September Wärtsilä, China Shipbuilding Industry Corporation and Mitsubishi Heavy Industries announced the establishment of a joint company to manufacture low-speed marine engines in China. This joint venture is part of Wärtsilä’s strategy to better serve the Asian shipbuilding industry and to strengthen its market share in low-speed engines.
• The acquisition in October of the entire business of the Swedish company Stockholms Fartygsreparationer AB gives Wärtsilä a base for further expansion along the Swedish east coast. It also forms part of Wärtsilä’s strategy to expand the business operations of Wärtsilä Services.
• In December Wärtsilä acquired the German ship design company group SCHIFFKO. SCHIFFKO specializes in the planning and design of ships especially in the container, research and offshore vessel segments. The acquisition supports Wärtsilä’s strategic focus to grow as a system integrator and provider of total solutions to the shipping and shipbuilding market.
• In November Wärtsilä, SKF and Rautaruukki sold the operating companies owned by Oy Ovako Ab, thereby concluding Wärtsilä’s plan to focus on its core businesses.

Strategic steps in 2005

Wärtsilä took several steps during 2005 to strengthen the leading positions of its Ship Power and Service businesses globally:

• Production of thrusters in China began in June; the first deliveries were made in September.
• The project to manufacture marine reduction gears in India is making planned progress.
• Construction of a new factory for Wärtsilä Qiyao Diesel Company Ltd (Shanghai), a 50/50-owned joint venture set up with China Shipbuilding Industry Corporation (CSIC). The company will start production of Wärtsilä diesel generating sets, used as auxiliary engines in marine vessels. Production is expected to begin in early summer 2006.
• A strategic alliance with Mitsubishi Heavy Industries Ltd (MHI) in the field of 2-stroke diesel engines.
• Two new Wärtsilä RT-flex engines will be designed in co-operation with Hyundai Heavy Industries Co. Ltd. (HHI) and will be tested in HHI’s production facilities.
• Wärtsilä took a 12.5% stake in Aker Arctic Technology Inc., which offers ship designs for shipyards, shipowners and offshore operators  operating in arctic waters.
• The transfer of the DEUTZ marine engine service business from the German company DEUTZ AG to Wärtsilä. Wärtsilä began to provide service and OEM parts for these engines globally from 1 April 2005.
• To expand its Service business Wärtsilä set up a marine service company in Estonia with the Estonian BLRT Grupp to serve the Baltic market early in the year. In the USA, Wärtsilä acquired in November a company specialized in the service of automation and control systems for diesel and gas engines.
• A service company was established in Hong Kong.