Wärtsilä Opens Propeller Factory in China

Thursday, June 28, 2007
Propeller in the new factory

Wärtsilä's joint venture company in China, Wartsila CME Zhenjiang Propeller Co Ltd., inaugurated its new propeller factory at Zhenjiang in Jiangsu province. The new factory is expected to double Wärtsilä's capacity to manufacture this type of propellers. During the past ten years the output has increased by 500 percent. In 2007 up to May, there are 425 vessels contracted in China, which is 45 percent of the global vessel order intake, ranking China number one in the world. The new factory has more than doubled the annual production output to 6,500 tons of propellers. The new maximum size of propeller that can be produced at the new factory is suitable for the world's largest container ships that are currently envisaged with propellers individually weighing up to as much as 140 tons.

The joint venture Wartsila CME Zhenjiang Propeller Co Ltd was set up in 2004 by Wärtsilä (55 percent) and Zhenjiang CME Ltd (45 percent), a subsidiary of China State Shipbuilding Corporation (CSSC). The total investment in the new factory is $13.4m. About 80 percent of the world's newbuildings use fixed-pitch (FP) propellers of the type manufactured in the new factory. Most of the propellers are sold to the rapidly-growing market in China. About 15 to 20 percent of the production is exported. Wartsila CME Zhenjiang delivers propellers to a number of Chinese shipyards. In addition to the state-owned yards there are also a growing number of privately-owned shipyards. The company has been successful in being selected as the sole supplier for several recently-established shipyards.

China has the strategic goal of being the world's largest shipbuilder in about ten years time. This means huge growth in both the number and capacity of shipyards. The new factory will concentrate on larger FP propellers, with diameters of more than 5m. It is designed for an annual production of some 200 propellers of that size, with individual weights up to a maximum of 140 tons.

In the present factory Wartsila CME Zhenjiang manufactures FP propellers up to a maximum of 70 tons unit weight. The new factory also allows the company to commence machining of propeller shafts so that the company can deliver complete FP propeller packages with complete shaft lines and accessories. The land area of the production site will give ample scope for further expansion. The new factory began test production on June 11, 2007. By September 2007, it will have 150 employees. It will be up to full production in the second half 2008 when it will have about 240 employees. The new factory is located about five minutes drive from the current propeller factory of Wartsila CME Zhenjiang towards the Zhenjiang port at the Yangtze River. The large FP propellers can be readily shipped from the Zhenjiang port to the shipyard customers.

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