Wärtsilä, CSIC and MHI join forces

Wärtsilä, China Shipbuilding Industry Corporation (CSIC) and Mitsubishi Heavy Industries (MHI) are establishing a joint venture to manufacture large, low-speed marine engines in China. CSIC will hold 50% of the joint venture, Wärtsilä 27% and Mitsubishi 23%. The investment will total around 75 million euros, spread over several years and production is scheduled to start during the fourth quarter of 2008.

The joint venture will be called Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co Ltd (QMD). The start-up of the joint venture is subject to final approvals, which are expected to be received by the end of October 2006.

“Our aim is to better serve the shipbuilding industry in China and thereby strengthen our market position in the low speed engines in rapidly growing Chinese shipbuilding market. The QMD factory is a practical demonstration of our strategy of working through partnerships to bring the aspirations of the partners into reality”, said Ole Johansson, President and CEO of Wärtsilä.

“For CSIC, the QMD factory is much more than increased manufacturing capacity. It enables CSIC to further develop the technological capabilities of its ship machinery industry; an objective which is greatly facilitated by international co-operation with strong technological partners such as Wärtsilä and MHI. Improved technological capabilities will, in turn, also encourage technical innovation among CSIC employees that will raise the competitiveness of Chinese shipbuilding and grow its market share,” says Li Chang Yin, President of CSIC.

“Developments such as the QMD factory will raise the reputation of Mitsubishi UE engines in world shipbuilding markets while extending the Mitsubishi UE engine business in an important country that is a rising dragon in shipbuilding. It will also bring more opportunities to offer Mitsubishi UE engines to shipowners in the world,” said Hiroo Uchimura, General Manager, Industrial Energy Power Systems Department of MHI.

The Chinese shipbuilding industry is growing rapidly and currently requires more engines than can be manufactured locally. As China has set itself the target of being the world?s leading shipbuilding country by 2020, demand for low-speed engines is increasing correspondingly. QMD will primarily serve Chinese shipyards, it will also be able to export engines to other shipbuilding markets such as Europe and India.

Co-operation continues

The QMD joint venture continues the co-operation started by Wärtsilä and CSIC in 2005 to produce auxiliary engines. With MHI Wärtsilä is co-operating in the form of a strategic alliance to develop two-stroke marine diesel engines. The QMD factory will produce large marine engines for Chinese shipyards. It will develop, manufacture and sell a new generation of energy-saving and environmentally-friendly low-speed two-stroke marine engines under licence from Wärtsilä and MHI. The factory will be built in the Shanghai area, where CSIC is setting up a marine industry cluster.