Strategic steps

• In February, Wärtsilä and DNV GL agreed to work together to contribute to the marine industry’s ongoing digital transformation. In particular, the two companies wish to further explore the potential use of digital technologies, collaborative data sharing, and standardisation to enhance the performance of existing products and services, and to develop new ones. The project will examine the application of digital technologies in areas such as autonomous ships, advanced remote services, new bridge technologies, and data sharing. Cyber security will be another natural area of co-operation.
• In March, Wärtsilä together with a consortium of six other industry and academic partners, was awarded EU funding for a major project named SeaTech. The project is aimed at reducing fuel consumption and lowering emission levels for shipping by developing ship engine and propulsion systems to enable precise control of the engine and capturing wave energy to produce extra thrust. Wärtsilä also signed a licence and co-operation agreement covering the future development, sales, and servicing of gate rudders with Kuribayashi Steamship in Japan. As an authorised license holder and partner, Wärtsilä intends to fully integrate gate rudders within its propulsion product designs and will focus on global markets outside Japan. Gate rudder technology lowers fuel consumption and reduces emissions, while improving manoeuvrability and course stability in both calm and rough seas.
• In June, Wärtsilä joined a global consortium to develop the Mayflower Autonomous ship project, which will enable the world’s first fully autonomous, unmanned vessel to cross the Atlantic. Wärtsilä Voyage will equip the ship with the Wärtsilä RS24 system, a ground-breaking high-speed, high-resolution FMCW K-Band radar designed to provide optimised levels of situational awareness, especially in densely populated marine environments. Wärtsilä also joined ING Bank, Engie, and the Port of Rotterdam Authority to form Zero Emission Services B.V. (ZES), an enterprise aimed at making inland waterway shipping more sustainable. The concept is based on the use of replaceable battery containers charged with renewable energy. It will be utilised, among others, by the Heineken beer company and is supported by the Dutch Ministry of Infrastructure and Water Management.
• In July, Wärtsilä joined a global coalition dedicated to accelerating the energy transition in the transport and logistics industries, together with a cluster of market-leading companies representing a broad spectrum of industry stakeholders. The aim of the coalition is to drive the development of energy sources and technologies in order to curb global warming, reduce air pollution, and protect biodiversity. The members will pool their R&D efforts in pursuit of three key goals: unlocking a more extensive portfolio of clean energy sources, lowering energy consumption per kilometre-equivalent for transported goods, and eliminating a substantial proportion of the harmful emissions being released into the atmosphere.
• In September, Wärtsilä announced the divestment of 100% of the shares in Wärtsilä JOVYATLAS GmbH to Jacob Waitz Industrie GmbH, a German based industry holding. The Wärtsilä JOVYATLAS offering consists of UPS systems, rectifiers, power inverters, frequency transformers, and resistors with related services. The company, which became part of Wärtsilä as a result of the acquisition of L-3 Communications MSI in 2015, is located in Jemgum in Germany and currently has some 125 employees. In 2019, its annual revenues were EUR 20 million. The divestment is driving Wärtsilä’s focus on creating a stronger and simpler core business.
• In October, Wärtsilä signed a Memorandum of Understanding (MoU) tied to a license and co-operation agreement with the UK-based Anemoi Marine Technologies for the future sales and servicing of rotor sail solutions to the shipping industry. Rotor sails are comprised of vertical cylinders which, when driven to rotate, harness the renewable power of the wind to propel ships. These highly efficient mechanical sails will provide additional thrust to vessels and deliver significant fuel and emission savings. Wärtsilä will fully integrate Anemoi Marine Technologies’ rotor sails within its propulsion business and promote the solution for both newbuild projects and for retrofitting to existing ships.
• In October, Wärtsilä announced the divestment of 100% of the shares in Wärtsilä Valves Ltd to an affiliate of Evergreen Capital L.P., based in New York, USA. Its activities include engineering, assembly, testing, sales, and delivery of nickel aluminium bronze (NAB) and duplex valves for the marine, oil and gas, and energy markets. Additionally, it offers applications for Valves’ products, including FPSO, petrochemical facilities, power generation, LNG, naval marine, marine services, waste water treatment plants, and pipelines. Wärtsilä Valves became part of Wärtsilä as a result of the Hamworthy acquisition in 2012. The company is located in Brough, UK and currently has approximately 65 employees. The annual revenues were approximately EUR 15 million in 2019.
• In October, Wärtsilä announced the divestment of 100% of the shares in Wärtsilä Valves Ltd to an affiliate of Evergreen Capital L.P., based in New York, USA. Its activities include engineering, assembly, testing, sales, and delivery of nickel aluminium bronze (NAB) and duplex valves for the marine, oil and gas, and energy markets. Additionally, it offers applications for Valves’ products, including FPSO, petrochemical facilities, power generation, LNG, naval marine, marine services, waste water treatment plants, and pipelines. Wärtsilä Valves became part of Wärtsilä as a result of the Hamworthy acquisition in 2012. The company is located in Brough, UK and currently has approximately 65 employees. The annual revenues were approximately EUR 15 million in 2019.
• In December, Wärtsilä closed the divestment of Wärtsilä ELAC Nautik GmbH (ELAC Nautik) to Cohort plc, a UK listed company, specialising in defence, security and related market sectors. ELAC Nautik became part of Wärtsilä as a result of the acquisition of L-3 Communications MSI in 2015. Its main market focus is on hydroacoustic products, including sonars, underwater communication and echo systems for small and medium sized military submarines. The company is located in Kiel, Germany and employs 125 people. The annual revenues were approximately EUR 20 million in 2019.
• In December, Wärtsilä joined the CHEK project which aims to achieve zero emissions shipping. The project will develop and demonstrate a wind energy optimised bulk carrier, and a hydrogen powered cruise ship equipped with a combination of innovative technologies to reduce greenhouse gas emissions by 99%, achieve at least 50% energy savings, and reduce black carbon emissions by over 95%. The CHEK partners are the University of Vaasa (coordinator), Wärtsilä, Cargill International, MSC Cruises, Lloyd’s Register, the World Maritime University, Silverstream Technologies, HASYTEC Electronics, Deltamarin, Climeon, and BAR Technologies.

Strategic projects, partnerships, acquisitions and divestments in 2019

• In April, Wärtsilä agreed to provide seed funding to Soletair Power Oy, a Finland-based start-up company operating in the field of Power-to-X. Soletair Power Oy has developed a concept to improve air quality in buildings by capturing carbon dioxide and converting it to synthetic renewable fuel. This was followed in May by the announcement of a research collaboration with Lappeenranta-Lahti University of Technology on strategic power system modelling, with the aim of understanding and developing paths towards energy systems operating 100% on renewable energy sources.
• In May, Wärtsilä announced the acquisition of Ships Electronic Services Ltd (SES), a UK based company specialising in navigation and communication electronics, as well as installation, maintenance, and repair services, mainly for commercial and leisure vessels. SES, established in 1974, has its headquarters in Rochester and operates also out of nine other offices in the UK.
• In June, Wärtsilä entered into a cooperation agreement with Aggreko, a global power equipment supplier, to introduce a new concept for power markets built around the Wärtsilä Modular Block solution. The cooperation will also enable new business and financing models, such as power as a service or rentals.
• In September, Wärtsilä and Q Power Oy, a Finnish bio-methanisation company, signed a cooperation agreement to accelerate the development and commercialisation of renewable fuels. The companies will work together to develop the market and find new business opportunities for bio-methanisation and synthetic fuels globally.
• In October, Wärtsilä co-founded a new global cyber security alliance for operational technology, which aims to bridge dangerous gaps in security for operational technology and industrial control systems. Operational technology encompasses the hardware and software used to control physical systems, such as machinery in factories, power stations, ships, or ports. The Internet of Things and inter-connectedness of production systems in smart factories means that there is a significantly and rapidly growing risk of serious security breaches in these environments.
• In November, Wärtsilä and Singapore-based PSA Marine announced their collaboration in the co-creation of smart technologies for the marine sector. Specific collaboration areas include the use of electric or hybrid technologies that enhance the utilisation of low-emission energy and propulsion systems, the incorporation of next-generation smart vessel technologies, the adoption of secured connectivity to facilitate ship-to-shore data exchange, as well as marketing and branding activities that generate awareness.
• In December, Wärtsilä signed a strategic development agreement with the Chinese state-owned shipbuilder CSSC Huangpu Wenchong Shipbuilding Company Limited. The purpose of the five-year agreement is to build a cooperation framework and working mechanism for the research and development of hybrid power systems. Wärtsilä will support Huangpu Wenchong during the design and construction phases with technology innovations, system selection, performance calculations, and long-term services.
• In December, Wärtsilä announced the divestment of Wärtsilä ELAC Nautik GmbH (ELAC Nautik) to Cohort plc, a UK listed company specialising in defence, security, and related market sectors. ELAC Nautik became part of Wärtsilä as a result of the acquisition of L-3 Communications MSI in 2015. Its main market focus is on hydroacoustic products, including sonars, underwater communication systems, and echo systems for small and medium sized military submarines. ELAC Nautik employs approximately 120 people and generates annual revenues of approximately EUR 21 million. Subject to approvals, completion of the transaction is expected in the early part of 2020.
  
  

Strategic projects, partnerships, acquisitions, divestments, and joint ventures in 2018

• In January, Wärtsilä and Schneider Electric signed an agreement to collaborate on data centre projects. The objective of the agreement is to work together to open markets for innovative data centre energy optimisation solutions, focusing on hyperscale projects having an electrical load of at least a 10 MW. Wärtsilä will provide the power generation plants, whereas Schneider Electric will focus on energy distribution optimisation.
• In February, Wärtsilä announced the expansion of its QuantiServ service offering with the acquisition of Lock-n-Stitch Inc., an American engineering company specialised in cast iron repairs. The acquisition strengthens Wärtsilä’s service portfolio for customers operating multiple brands. Wärtsilä also completed the acquisition of Trident BV, a Netherlands based company specialised in underwater ship maintenance, inspection, and repair services. This acquisition enables Wärtsilä to become a leading global operator in the underwater services market. Further supporting the growth of Wärtsilä’s underwater services was the acquisition in October of Burriel Navarro, S.L, a company operating in underwater services in the main ports of Spain.
• In March, Wärtsilä announced the acquisition of Transas, a global market leader in marine navigation solutions, professional training and simulation services, ship traffic control, as well as in monitoring and support. The acquisition represents a considerable step forward towards the realisation of Wärtsilä’s Smart Marine vision, whereby smart vessels connect with smart ports and beyond to deliver three fundamental industry benefits: maximising the use of resources and operational efficiency, minimising environmental impact and risk, and achieving the highest levels of safety and security. Valued at EUR 210 million (enterprise value), the transaction closed in May 2018.
• In April, Wärtsilä announced a partnership with the cyber security company Templar Executives to establish a world-class cyber academy in Singapore. The academy will offer courses designed to support and enhance the collective cyber maturity of the wider shipping community, notably operators and owners. Wärtsilä has also partnered with the Maritime and Port Authority of Singapore to promote maritime innovation and R&D. The partnership covers four different streams: digital acceleration, cyber-physical security, intelligent vessels, and port operations.
• In June, Wärtsilä and Hyundai Motor Group signed a technology and commercial partnership contract designed to utilise second-life electric vehicle (EV) batteries for the growing energy storage market. The partnership will target advanced energy storage products and platforms that maximise Hyundai’s second-life EV batteries to be commercialised via Wärtsilä’s existing customer and channel networks throughout 178 countries globally.
• In August, Wärtsilä announced that it will build a new centre of research, product development and production, the Smart Technology Hub, in Vaasa, Finland. The hub will be unique in its field, enabling more agile, more efficient testing and product development of solutions for the maritime, oil and gas industries, as well as new energy systems. As a part of the project, Wärtsilä will invest EUR 83 million in modern testing and production technology for the hub. The majority of these costs will materialise in 2020. The total investment in the Smart Technology Hub will be in the region of EUR 200 million, consisting of office and factory buildings, logistics and infrastructure.
• In October, Wärtsilä divested its pumps business to Solix Group, a Scandinavian investment company with offices in Copenhagen, Denmark and Malmö, Sweden. Wärtsilä Pumps has belonged to the Wärtsilä Marine Solutions organisation and became part of the company along with the acquisition of Hamworthy in 2012. The divestment enables Wärtsilä to devote greater focus to its Smart Marine vision.
• In November, Wärtsilä, Finland’s Lappeenranta University of Technology (LUT), and Nebraska Public Power District (NPPD), the largest electricity utility in the state of Nebraska, signed a Memorandum of Understanding (MoU) for the study of the development of a business case for the use of alternative fuels with Wärtsilä generating sets. The aim of the business case is to achieve a technically and commercially viable solution, allowing to proceed with an industrial scale pilot project.
• In December, Wärtsilä introduced its Innovation Community Initiative together with Tieto, St1, Fortum and Demos Helsinki, with the aim of accelerating the global energy sector’s transition towards more sustainable energy generation. The community will provide an arena to study, improve, experiment, validate and bring to market new innovations that challenge current energy system paradigms.

Strategic projects, acquisitions, joint ventures, and manufacturing footprint in 2017

• In July, Wärtsilä completed the acquisition of Greensmith Energy Management Systems Inc., a market leader in grid-scale energy storage software and integrated solutions. The acquisition will enable Wärtsilä to rapidly expand its footprint in the global energy storage market, and position itself as a premier energy systems integrator. In 2016, Greensmith’s revenues were USD 32 million with over 40 employees. The integration of Greensmith is proceeding according to plan.
• In August, Wärtsilä and ABB signed an agreement to expand their co-operation in lifecycle service offerings. ABB granted Wärtsilä Authorized Service Provider status for the standard maintenance of ABB turbochargers installed with Wärtsilä 4-stroke engines.
• In September, Wärtsilä added wave power technology to its capabilities as an energy systems integrator through its partnership with AW-Energy. The co-operation is based on AW-Energy’s patented and certified wave energy technology and Wärtsilä’s global project execution, services, and integration capabilities.
• In October, Wärtsilä announced the acquisitions of Puregas Solutions and Guidance Marine. Puregas Solutions is a Sweden based leader in turnkey biogas upgrading solutions. The acquisition complements Wärtsilä’s existing position in the biogas liquefaction market. In 2016, Puregas Solutions had approximately 40 employees and a turnover of SEK 200 million. Guidance Marine Limited, a UK based privately owned company, is a technology leader in the marine industry for sensor solutions relating to dynamic positioning and other vessel control systems. The acquisition enhances Wärtsilä’s capabilities in the areas of situational awareness and near-field measurement, both essential for more intelligent vessel navigation. In 2016, Guidance Marine employed more than 50 people worldwide and had a turnover of GBP 6 million.
• In December, Wärtsilä and GTT, the designer of cryogenic membrane containment solutions for liquefied gases, finalised a co-operation agreement to explore potential business opportunities in the marine sector in relation to LNG storage, fuel gas supply systems, and associated services that will benefit both shipyards and vessel owners. Wärtsilä also signed a 10-year service partnership agreement with Winterthur Gas & Diesel Ltd. (WinGD). According to the agreement, Wärtsilä will continue to provide extensive customer support and services to the end users of WinGD’s products, to WinGD, as well as to licensed engine builders. The agreement includes service work conducted for any 2-stroke engines delivered under the Wärtsilä, Sulzer, and WinGD brands.
• Towards the end of the year, Wärtsilä announced the opening of the CSSC Wartsila Electrical & Automation Co Ltd (CWE&A) joint venture between Wärtsilä and China State Shipbuilding Corporation (CSSC), and the acquisition of Trident B.V., a Netherlands based company specialised in underwater ship maintenance, inspection, and repair services. The acquisition of Trident enables Wärtsilä to become a leading global operator in the underwater services market.

Strategic projects, acquisitions, joint ventures, and manufacturing footprint in 2016

• In March, Wärtsilä and China State Shipbuilding Corporation signed a letter of intent to establish a new joint venture company, which will focus on China’s growing market for marine electrical & automation solutions.
• In April, Wärtsilä announced that it would enter the solar energy business by offering utility-scale solar photo-voltaic (PV) solutions. The new solutions include solar PV power plants of 10 MW and above, and hybrid power plants comprising solar PV plants and internal combustion engines. Both solutions are offered with full engineering, procurement and construction capability.
• In June, Wärtsilä announced the acquisition of Eniram, a Finland-based technology company providing the marine industry with energy management and analytics solutions. Eniram will enable Wärtsilä to enhance its digital offering and in-house capabilities, specifically in data analytics, modelling and performance optimisation. Wärtsilä also announced the acquisition of American Hydro, a US-based supplier and installer of large equipment upgrades and servicing for the hydroelectric and water distribution industries.
• During the second quarter, Wärtsilä transferred its 30% minority stake in the two-stroke joint venture Winterthur Gas & Diesel (WinGD) to China State Shipbuilding Corporation (CSSC). Following the transaction, CSSC owns 100% of WinGD.
• In July, Wärtsilä announced that it had entered into a cooperation agreement with U.S.-based Greensmith Energy to further strengthen its energy system integration capabilities.
• In July, Wärtsilä and other leading marine industry players formed a coalition, known as SEA/LNG, with the aim of helping to break down the barriers hindering the global development of LNG in marine applications, thereby improving the environmental performance of the shipping industry.
• In August, Wärtsilä and Finland based Gasum signed a cooperation agreement aimed at developing the use and distribution, as well as service solutions for natural gas in marine and onshore applications.
• In November, Wärtsilä and the French multinational energy company ENGIE signed an agreement to develop solutions and services within the small-scale LNG business sector.
• In December, Wärtsilä signed a manufacturing license agreement with Jiujiang Precision Measuring Technology Research Institute, a subsidiary of China State Shipbuilding Corporation (CSSC), based in Jiujiang, China. The two-way agreement provides CSSC with access to technology and the rights to manufacture the Wärtsilä Aquarius EC Ballast Water Management System under license for CSSC customer applications. In return, Wärtsilä gains access to CSSC’s new manufacturing facility, thereby further supporting the supply and demand needs of Wärtsilä customers for the company’s ballast water management systems.
• Construction of the CSSC Wärtsilä Engine (Shanghai) Co. Ltd factory in Lingang, Shanghai was finalised in the fourth quarter and the official inauguration took place on 9 January 2017.

Strategic projects, acquisitions, joint ventures, and expansion of the network in 2015

• The agreement between Wärtsilä and China State Shipbuilding Corporation (CSSC) for the take‑over of Wärtsilä’s 2‑stroke engine business was finalised in January. Winterthur Gas & Diesel Ltd is owned 70% by CSSC and 30% by Wärtsilä.
• The acquisition of L‑3 Marine Systems International (MSI) from the NYSE‑listed L‑3 Communications Holdings Inc. was finalised and control of the company transferred to Wärtsilä with effect from 1 June 2015. Integration is proceeding according to plan and MSI’s financial development in 2015 was somewhat better than expected. Further information on the acquisition can be found in the financial statements.
• In July, Wärtsilä established a subsidiary to trade spare parts for classic 4‑stroke Wärtsilä engines. QuantiParts B.V., fully owned by Wärtsilä, operates from the Netherlands and serves customers in the marine, locomotive, and power plant industries worldwide.
• In October, Wärtsilä Services expanded into a new market segment, offering a comprehensive package of seals, bearings, and associated solutions to hydropower installations and industrial plants worldwide.
• Construction of the CSSC Wärtsilä Engine (Shanghai) Co. Ltd factory in Lingang, Shanghai is proceeding according to plan. The ground breaking ceremony for the erection of the factory took place on the 28th of October. The first engines are expected to be ready for delivery by the end of 2016.

Strategic projects, acquisitions, joint ventures, and expansion of the network in 2014

• In December, Wärtsilä announced the acquisition of L-3 Marine Systems International (L-3 MSI) from NYSE listed L-3 Communications Holdings Inc. L-3 MSI delivers automation, navigation and electrical systems, as well as dynamic positioning technology, and sonar and underwater communications technology for the marine, naval and offshore markets. The transaction is valued at EUR 285 million (enterprise value), subject to customary adjustments including an estimated reduction of EUR 60 million for L-3 MSI employee pension related liabilities to be assumed by Wärtsilä. Financing for the deal will be from existing cash resources and credit facilities. The acquisition is subject to clearance from the regulatory authorities and is expected to be closed during the second quarter of 2015.
• Wärtsilä Yuchai Engine Co. Ltd., the 50/50 joint venture between Wärtsilä and Yuchai Marine Power Co., Ltd, inaugurated its new factory in Zhuhai, China in September. The new factory site covers a total area of 266,700 square meters. The factory will be used for the assembly and testing of Wärtsilä 20, Wärtsilä 26 and Wärtsilä 32 medium-speed engines. The plant is expected to be in full production before the end of 2016. The inauguration ceremony for Wärtsilä’s new fully-owned manufacturing facility in Brazil is expected to take place in the first quarter of 2015.
• The set-up of a joint venture between Wärtsilä and China State Shipbuilding Corporation (CSSC) for the manufacturing of medium and large bore medium-speed diesel and dual-fuel engines, announced in July, is proceeding according to plan. Wärtsilä’s share of the joint venture will be 49% and the size of Wärtsilä's equity investment is approximately EUR 12 million. The CSSC Wärtsilä Engine (Shanghai) Co. Ltd factory will be located in Lingang, Shanghai and is expected to have its first engine ready for delivery during the first half of 2016. The joint venture will target the growing offshore and LNG markets, as well as the auxiliary engine market for very large container vessels.
• The divestment of Wärtsilä’s 50% share in the joint venture Wärtsilä TMH Diesel Engine Company LLC to Transmashholding, the other joint venture party, was completed in July. The joint venture was established for the manufacture of modern and multipurpose diesel engines to be used in shunter locomotives, as well as in various marine and power applications. The value of the agreement was approximately EUR 12 million and the transaction did not have a significant impact on Wärtsilä’s operating result.
• In January 2014, Wärtsilä confirmed the approach by Rolls-Royce with a preliminary proposal for a possible offer and that there were no longer ongoing discussions with Rolls-Royce.

Strategic projects, joint ventures and expansion of the network in 2013

• Construction of the new production facilities for Wärtsilä Yuchai Engine Co., Ltd, the joint venture owned 50/50 by Wärtsilä and Yuchai Marine Power Co. Ltd., is proceeding according to plan. The company will manufacture Wärtsilä 20, Wärtsilä 26 and Wärtsilä 32 medium-speed marine engines to serve the increasingly dominant Chinese shipbuilding industry. Production is planned to begin in mid 2014.
• The Wärtsilä TMH Diesel Engine Company LLC factory is expected to begin production during the first quarter of 2014.
• In March, Wärtsilä announced the set up of a new, fully-owned manufacturing facility in Brazil to meet the increasing market demand, particularly in the offshore market. The manufacturing premises will be based on a multi-product factory concept for the assembly and testing of Wärtsilä’s generating sets and propulsion products. In the initial phase, activities will focus on medium sized, medium-speed generating sets and steerable thrusters, with the possibility to flexibly expand the product range to respond to market needs. The value of Wärtsilä’s investment is approximately EUR 20 million and the facility is scheduled to be fully operational by mid 2014.
• In February, Wärtsilä continued to expand its service network by opening a new service workshop in Niterói, Rio de Janeiro, Brazil.

• In the beginning of 2012, Wärtsilä finalised the acquisition of Hamworthy. The acquisition brings important growth synergies to Wärtsilä in the offshore, marine gas applications and environmental solutions markets. Hamworthy has been divided into two business lines; Flow & Gas solutions and Environmental solutions and the integration into Wärtsilä's Ship Power business is moving according to plan. Wärtsilä's target is to double the net sales for Flow & Gas solutions and Environmental solutions over the next five years. The total consideration for the company was EUR 456 million, while the cash flow from the acquisition was EUR 389 million due to Hamworthy's cash balance at closing.
• In March 2012, Wärtsilä signed a contract to acquire the assets and business of MMI Boiler Management Pte Ltd., the Singapore-based company specialising in the service and maintenance of boilers for marine and industrial applications. The purchase price is approximately EUR 3 million.
• In December 2012 Wärtsilä and Yuchai Marine Power Co. Ltd. signed an agreement in Zhuhai, China to establish a 50/50 joint venture for manufacturing medium-speed marine engines in Zhuhai City, Guangdong Province. The joint venture will serve the increasingly dominant Chinese shipbuilding industry, with the emphasis being on the assembly and testing of Wärtsilä 20, Wärtsilä 26 and Wärtsilä 32 engines. Operations are planned to start in 2014.
• Wärtsilä Qiyao Diesel Company, a joint venture company manufacturing Wärtsilä 20 auxiliary engines, is planning to expand its production capacity. The planned joint venture between Wärtsilä and Jiangsu CuiXing Marine Offshore Engineering Co. Ltd. has been discontinued.
• Wärtsilä TMH Diesel Engine Company LLC, a joint venture owned 50/50 by Wärtsilä and Transmashholding, has begun construction of a modern factory located in Penza, Russia. The new plant is expected to be ready to start production in the second half of 2013, and will provide worldclass assembly and manufacturing facilities. The joint venture will give Wärtsilä a stronger industrial foothold in Russia.
  
  
  

• In November 2011, Wärtsilä inaugurated its new spare parts distribution centre in Kampen, the Netherlands. The Central Distribution Centre integrates eight previously localised spare parts warehouses into one global supply chain operation. It covers the entire material flow, from order confirmation until the point of delivery at the customer’s doorstep. The new centre will shorten transportation distances, reduce spare parts traffic between warehouses, and improve management of the entire supply chain. Wärtsilä’s total investment in the new distribution centre has been approximately EUR 70 million. Wärtsilä is currently optimising the operations of the distribution centre.
• In June, Wärtsilä and Jiangsu CuiXing Marine Offshore Engineering Co. Ltd. agreed to establish a joint venture for the manufacturing of Wärtsilä 26 and Wärtsilä 32 medium-speed marine engines in China. The set up of the joint venture is proceeding according to plan.
• In July, Wärtsilä acquired Cedervall, one of the leading manufacturers of shaft seal and bearing systems for the marine industry. This acquisition strengthens Wärtsilä’s leading position in the global service market, in line with its strategy. The combination of Wärtsilä’s and Cedervall’s businesses will create market leadership in oil and water lubricated seals and bearings and sterntubes. The total preliminary consideration of the transaction is EUR 81 million.
• Wärtsilä continued to expand its Services network. A new workshop was inaugurated in Gdansk, Poland during the second quarter. During the third quarter, a new workshop facility was opened in Helsinki, Finland.
• In November 2011, Wärtsilä announced that it had reached agreement with the Board of Hamworthy in regards to a recommended cash offer for the acquisition of Hamworthy, a global provider of specialist equipment and services to the marine, oil & gas and industrial sectors. Under the terms of the acquisition Hamworthy shareholders will receive 825 pence in cash for each Hamworthy share. Hamworthy is listed on the London Stock Exchange’s Alternative Investment Market. The acquisition will be effected by means of a Scheme of Arrangement under English law. On 9 January 2012, all the resolutions proposed received the strong support of Scheme Shareholders at both the Court Meeting and General Meeting of Hamworthy plc. The Court sanctioned the Scheme on 26 January 2012. Subject to the Court hearing confirming the associated Reduction of Capital on 30 January 2012, the Scheme is expected to become effective and the control transferred to Wärtsilä on 31 January 2012. 
  
  
  

• In May, Wärtsilä signed a joint venture agreement with the Russian company Transmashholding (TMH) to manufacture modern multipurpose diesel engines in Russia. The engines, including a new and technically advanced version of the Wärtsilä 20-engine, will be used in shunter locomotives and for various marine and power applications. The two companies will jointly engineer the railway application. Wärtsilä and TMH will also evaluate broadening the activities of the joint venture to include the development and manufacturing of other diesel engine models in the future. The value of Wärtsilä’s investment in the joint venture is approximately EUR 30 million and production of the engines is planned to start in 2012.
• Wärtsilä continued to expand its service network with the inauguration of a new office and workshop facility in Panama.
  
  
  

• Wärtsilä continued pursuing its strategy of expanding its network with new service facilities in many countries, including Ukraine, Cameroon, Hungary, Chile, Dubai, Russia and Sweden. These facilities provide a good base for future service growth, and expansion the network will continue to be one of Wärtsilä’s strategic focus areas in the future.
• In May, Wärtsilä acquired 60% of the shares of Wärtsilä Navim Diesel of Italy, thus increasing its ownership of the company to 100%. Wärtsilä Navim Diesel, which specialises in marine sales and service, has a strong market position, particularly in the Cruise & Ferry segment. The transaction resulted in EUR 8 million of new goodwill.

• In March, Wärtsilä signed an agreement to acquire the Norwegian company Maritime Service AS, which specialises in ship service, and mechanical and reconditioning services. Maritime Service has its operations in Ålesund, on the west coast of Norway. The annual net sales of Maritime Service were NOK 26 million (EUR 3.2 million) in 2007.
• In April, Wärtsilä acquired the Danish company International Combustion Engineering A/S (I.C.E.) that specialises in project engineering and the service and repair of steam boilers and ancillary burner systems. The company’s annual net sales amounted to DKK 46.8 million (EUR 6.3 million) in 2007.
• In June, Wärtsilä acquired the German company Claus D. Christophel Mess- und Regeltechnik GmbH (CDC), which specialises in the design, delivery and service of automation systems for ship owners and yards. CDC’s annual net sales were EUR 2.1 million in 2007.
• In July, Wärtsilä signed an agreement to acquire the global ship design group Vik-Sandvik, a leading independent group providing design and engineering services to ship owners and the ship building industry worldwide. This acquisition was a major step in Wärtsilä’s strategy to strengthen its position as a total solutions provider and to be the most valued partner for its customers. Wärtsilä’s goal is to become the leading provider of ship design services in various segments. The value of the acquisition was EUR 132 million, with an additional maximum sum of EUR 38 million to be paid based on the performance of the business over the next three years. In 2007, Vik-Sandvik’s net sales were EUR 55 million and the profitability is at a very good level. The number of employees is 410. Vik-Sandvik has been included in the consolidation since August 1, 2008.
• In September, Wärtsilä acquired Navelec SAS, a French company specialising in marine navigation and communication systems, electrical marine services, and control and automation services. Through this acquisition Wärtsilä is able to broaden its service offering and technological knowledge in the areas of navigation and communications. It also strengthens Wärtsilä’s position as the leading service provider within electrical marine and automation services. Navelec’s annual net sales were EUR 7 million in 2007. The company employs 45 people.
• In September Wärtsilä continued to expand within the field of ship design with the signing of an agreement to acquire Conan Wu & Associates Pte Ltd (CWA), a leading naval architecture and ship design company in Singapore. The deal also includes partnership agreements regarding CWA’s businesses in Malaysia and China. The price of the deal is EUR 23 million with an additional amount to be paid based on the performance of the business during the years 2008-2010. In 2007, CWA’s net saleswere EUR 10.7 million and the profitability was at a very good level. CWA has 66 employees in Singapore. The acquisition price was paid and the company consolidated during the fourth quarter.
• In July, Wärtsilä Corporation and the Manara Consortium formed a joint venture, Manara Wärtsilä Power Ltd (MWP), which aims to become the leading developer of decentralised independent power producer (IPP) projects in Islamic countries. Wärtsilä owns 19.9% of the company.
• In September, Wärtsilä and Metso signed a contract to form a joint venture combining Metso’s Heat & Power business and Wärtsilä’s Biopower business. The new joint venture is one of Europe’s leading providers of medium- and small-scale power and heating plants, focusing on renewable fuel solutions. Metso owns 60% and Wärtsilä 40% of the joint venture. It is estimated that in 2008 the consolidated annual pro forma net sales of the joint venture was approximately EUR 130 million, and the number of employees approximately 200. All regulatory approvals required for the closing of the transaction were received during the fourth quarter of 2008. The order book relating to the Bio-Power business, EUR 116 million, was transferred to the joint venture at the end of the year and was thereby eliminated from Wärtsilä’s order book.
• During the review period, Wärtsilä Services continued the expansion of its network by opening and expanding offices and workshops in Namibia, Chile, Brazil, Madagascar, Azerbaijan, China, Turkey and Dubai. Geographical expansion continues to be part of Wärtsilä’s strategic focus.

• 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 acquisition of part 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.

• 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.

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.