Wärtsilä has signed an agreement with Zhenjiang CME Ltd, a subsidiary of China State Shipbuilding Corporation (CSSC), to begin the manufacture of controllable pitch propellers (CP propellers) at the two companies' joint venture unit, Wärtsilä CME Zhenjiang Propeller Co Ltd, located in Zhenjiang, Jiangsu province. The inauguration of the new factory and the first deliveries are planned for the second quarter 2011.
Wärtsilä CME Zhenjiang Propeller Co Ltd will invest $16.4m in a state-of-the-art facility for manufacturing CP propellers. The investment includes the construction of a new 8,000 m2 factory at the same location as the existing fixed pitch propellers (FP Propellers) factory.
Wärtsilä CME Zhenjiang Propeller Co Ltd was set up in 2004 between Wärtsilä, with a 55 percent share, and Zhenjiang CME Ltd with 45 percent. The joint venture has fast grown to the point that it is now the biggest manufacturer and supplier of FP propellers in China, and one of the biggest in the world.
The majority of the equipment needed will be relocated from the factory in Drunen, the Netherlands, where Wärtsilä has announced that production activities will be ended by the end of this year. Wärtsilä will continue to design and produce some CP propellers in Europe, mostly for specific projects. However, the majority of the products will be manufactured in the new CP propellers factory in China.
"The introduction of CP propeller manufacturing technology into China is in line with our expectations and plans related to the growth of shipbuilding in China. Capacity in the industry is growing very fast, and Chinese shipyards are building technically more demanding ships. Together with our joint venture company, we are now able to offer advanced propulsion systems for any required application. We will still continue producing part of the special CP propellers in Europe, where we will also maintain all our Research & Development activities", says Lars Hellberg, Group Vice President, Industrial Operations of Wärtsilä Corporation.
The new factory will be able to produce all sizes of controllable pitch propellers with a specialized in-house bronze casting supply from the existing foundry. Currently Wärtsilä can offer a uniquely wide range of CP propellers with an output of between 1.5 to 60 MW. Wärtsilä has earned a reputation for being able to design suitable products, even for the most challenging customer requirements.
Most of the propellers will be sold to the rapidly growing Chinese markets. It is estimated that about 30 per cent of production of Wärtsilä CME Zhenjiang Propeller Co Ltd will be exported. As about 20 per cent of the world's newbuildings use CP propellers of the type manufactured in the new factory, Wärtsilä foresees significant potential in all global markets in addition to the Chinese market.
China has become one of the world's leading shipbuilder nations. During the first eight months of this year, China's share of all secured contracts for the building of new ships was 49 per cent in terms of numbers of vessels, and 47 percent in terms of DWT (Dead Weight Tonnage).