Wärtsilä and Shanghai Marine Diesel Engine Research Institute sign joint venture agreement on auxiliary engine production

Wärtsilä Corporation, Stock exchange release 21 April 2005 at 17:00 UTC+2

Wärtsilä and Shanghai Marine Diesel Engine Research Institute, an underlying company of China Shipbuilding Industry Corporation (CSIC), have today signed a joint venture contract to start manufacturing of Wärtsilä designed marine auxiliary engines in China. The 50/50 owned company will be named Wärtsilä Qiyao Diesel Company Ltd. The parties will invest a total of EUR 6.6 million in the company, Wärtsilä´s share of this investment being EUR 3.3 million. The letter of intent was signed on.

A new assembly factory will be constructed in the Shanghai area where the new company will manufacture defined Wärtsilä Auxpac W20 generating sets for the growing shipbuilding market in China and distribute these through Wärtsilä’s global sales network. Auxiliary engines are used for producing electricity in ships.

The joint venture is subject to relevant authority approvals. The joint venture company will start its operations after the business licence has been received. Production is estimated to start in early summer 2006.

Shanghai Marine Diesel Engine Research Institute is well known for its diesel engines, engine room automation equipments, noise and vibration reduction solution and for its petrochemical machinery products. The number of employees is 800.

China Shipbuilding Industry Corporation (CSIC) is one of the largest groups in China in the field of military and merchant ships, marine engineering and marine equipment which it designs, manufactures and sells. CSIC consists of 47 industrial enterprises, 28 scientific technological research institutes and 20 shareholding companies. In 2004 CSIC’s ship deliveries totalled 2.14 million DWT with an order book of 10.2 million DWT. The total number of employees is 160,000. 

Wärtsilä Corporation is the leading ship power supplier for builders, owners and operators of vessels and offshore installations. Wärtsilä has a global service network to take complete care of customers’ ship machinery at every lifecycle stage in more than 60 countries. Wärtsilä is a leading provider of power plants, operation and lifetime care services in decentralized power generation. In 2004 Wärtsilä generated net sales totalling EUR 2.5 billion. It has 12,400 employees.

For further information, please call

Mr Mikael Mäkinen, Executive Vice President, Head of the Ship Power business, tel. +358 10 7095620.